Key facts
- The U.S. is backing the Ampasindava rare earths project in Madagascar.
- The project is part of a U.S. strategy to loosen China's grip on critical mineral supply chains.
- The U.S. International Development Finance Corporation committed up to $4.48 million for pilot plant work.
- The Ampasindava project is expected to produce about 4,000 metric tons of rare earth oxides annually.
- Harena Rare Earths aims to begin production by mid-2028 and is considering U.S. and European processing options.
The United States is supporting the Ampasindava rare earths project in Madagascar as part of a broader strategy to diversify critical mineral supply chains and reduce reliance on China. The State Department highlighted this initiative, emphasizing Washington's push to develop alternative sources for minerals largely controlled by Beijing.
Harena Rare Earths, the London-listed developer of the approximately $150 million Ampasindava project, announced that the U.S. International Development Finance Corporation (DFC) has committed up to $4.48 million. This funding is designated for pilot plant work, laboratory testing, and environmental programs, which are crucial steps toward potential future financing.
A State Department spokesperson stated that U.S. critical minerals strategy in Africa aims to boost American investment in mining sectors often characterized by "opaque, predatory investments from our adversaries." Madagascar is seen as a key country within this strategy, with opportunities for increased U.S. and aligned investment.
China currently dominates global rare earth mining and processing and has previously used export controls to exert influence over supply chains vital for electric vehicles, wind turbines, electronics, and defense systems. The Ampasindava project's ionic clay deposit is rich in neodymium, praseodymium, dysprosium, and terbium, elements essential for manufacturing permanent magnets used in advanced defense applications like fighter jets and precision-guided missiles.
Harena estimates the project will produce around 4,000 metric tons of rare earth oxides annually, including 1,700 tons of high-value magnet rare earths. The company is currently seeking an exploitation permit and hopes for approval within weeks. Harena aims to commence production by mid-2028 and is exploring processing options in the U.S. and Europe, with potential partners including MP Materials, USA Rare Earths, and Solvay. While the initial DFC commitment is modest, it could pave the way for larger U.S. financial backing as the project progresses.