Key facts
- The U.S. International Development Finance Corporation (DFC) committed up to $4.84 million to Harena Rare Earths’ Ampasindava project in Madagascar.
- The funding is intended for pilot plant operations, metallurgical testing, and environmental studies.
- The Madagascar project is projected to yield 4,000 metric tons of rare earth oxides annually, including 1,700 tons of magnet elements.
- The U.S. aims to counter China's significant control over global rare earth mining and processing.
- This initiative is part of a broader U.S. strategy to secure critical mineral supply chains and reduce reliance on China.
The Trump administration is bolstering its efforts to challenge China's dominance in the critical rare earths market by supporting a new project in Madagascar. The U.S. International Development Finance Corporation (DFC) has pledged up to $4.84 million to Harena Rare Earths' Ampasindava project.
This funding is designated for pilot plant operations, metallurgical testing, and environmental studies. Successful completion could lead to larger U.S. government-backed construction financing for the project, which Harena estimates will cost approximately $150 million. The Ampasindava ionic clay deposit is anticipated to produce 4,000 metric tons of rare earth oxides annually, including significant quantities of high-value magnet elements like neodymium, praseodymium, dysprosium, and terbium.
A State Department spokesperson indicated that Washington is actively seeking to increase its investments in critical minerals across Africa, framing it as a countermeasure against what it describes as "opaque, predatory investments from our adversaries," a clear reference to China. China currently holds a commanding position, controlling nearly 70% of global rare earth mining and close to 90% of refined magnet processing.
These rare earth elements are crucial for a wide array of modern technologies, including crude oil refining, advanced defense systems, electric vehicle batteries, wind turbines, healthcare devices, and consumer electronics. The spokesperson emphasized that Madagascar aligns with this strategy, presenting opportunities for increased U.S. and allied investment in the critical mineral sector.
This Madagascar initiative follows previous U.S. government support for African rare earths projects. In February, the U.S. Trade and Development Agency provided an $1.87 million grant to Altona Rare Earths for a pre-feasibility study on its Monte Muambe rare earths project in Mozambique. That project is estimated to produce around 15,000 tonnes of mixed rare earth carbonate annually over an 18-year mine life, with an estimated development cost of $276.3 million. Altona is also evaluating the recovery of gallium as a valuable byproduct and the potential of fluorspar deposits.
The Trump administration has engaged in numerous financing deals with rare earth companies to secure the U.S. supply chain. These include a significant public-private partnership with Nevada-based MP Materials, involving a $400 million purchase of preferred stock and a $150 million loan, along with a price floor commitment for magnets. A similar agreement was made with Oklahoma-based USA Rare Earth, including a 10% equity stake as part of a $1.6 billion financing package.
China has previously leveraged its rare earth dominance, particularly during trade disputes, by imposing export controls and restricting processing technologies. Last year, Beijing implemented export licensing requirements on several rare earth elements in response to U.S. tariffs, and later expanded these restrictions. Most recently, China blacklisted 10 American companies, including MP Materials and USA Rare Earth, from acquiring Chinese dual-use materials, in a retaliatory move following U.S. actions against Chinese tech firms.