US$50 Million DFC Investment Backs South African Rare Earth Extraction Project

Two enormous sandlike dunes at an old chemical processing plant in South Africa are at the centre of an exploratory US-backed project to extract highly sought-after rare earth elements from industrial mining waste.

The Phalaborwa Rare Earths Project has US support through a US$50 million equity investment by the government's International Development Finance Corporation and is part of accelerated US efforts to reduce its reliance on China for the minerals crucial for making electronic devices, robotics, defence systems, electric vehicles and other hi-tech products.

Countries have identified dozens of minerals, including copper, cobalt, lithium and nickel, as critical because they are essential for new technologies. The 17 rare earth elements are a subset of them.

President Donald Trump has made expanding US access to critical minerals, including rare earth elements. The Trump administration said this year it will deploy nearly US$12 billion to create its own strategic reserve.

The Development Finance Corporation (DFC) was created during the first Trump administration and committed its investment in the Phalaborwa project in 2023, under former US President Joe Biden.