US backs South Africa project to extract rare earths despite diplomatic clash

The U.S. International Development Finance Corporation invested $50 million in the Phalaborwa Rare Earths Project to extract rare earth elements from industrial mining waste, and the project aims to begin extraction in 2028.

Two large sandlike dunes at an old chemical plant in Phalaborwa, South Africa, are the focus of a U.S.-backed effort to extract rare earth elements from industrial mining waste. The U.S. International Development Finance Corporation committed $50 million in equity to the Phalaborwa Rare Earths Project. The work is part of U.S. efforts to broaden access to critical minerals used in electronics, electric vehicles and defense systems. The DFC's investment is being made through partner TechMet and the project is being developed by Rainbow Rare Earths, and it has proceeded despite a diplomatic rift between the United States and South Africa. Key facts: - The DFC committed a $50 million equity investment to the Phalaborwa Rare Earths Project. - The site includes two dunes composed of about 35 million tons of phosphogypsum, a mining and processing byproduct. - Rainbow Rare Earths says it aims to produce elements such as neodymium, praseodymium, dysprosium and terbium for high-performance magnets and other uses. - The DFC's investment is routed through partner company TechMet, and South Africa's government does not hold a direct stake in the project. - The project aims to begin extracting rare earths from the dunes in 2028. Summary: The project is presented as part of U.S. efforts to diversify supply of critical minerals and to reduce reliance on China for those materials. Extraction is scheduled to begin in 2028, and the DFC investment has continued despite broader diplomatic tensions between the two countries.