The United States has invested $62.8 million in four African rare-earth projects amid growing efforts to reduce its dependence on China for critical minerals and concerns over private investors’ reluctance to enter the sector.
The US development-finance agency committed $62.8 million to rare-earth projects in Malawi, Angola, Madagascar and South Africa, although none of the projects has reached production, according to two senior DFC officials who spoke to Reuters.
The latest initiative highlights the growing importance of rare earths, critical minerals used to produce powerful magnets for electric vehicles, wind turbines, electronics and defence systems.
Their strategic importance has grown as countries seek to reduce their dependence on China, which dominates the global rare-earth supply chain and has tightened export controls in recent years.
DFC Steps In as Private Capital Holds Back
The largest share of DFC funding, about US$50 million, was allocated to the Phalaborwa rare-earth project in South Africa, backed by Dublin-based mining investor TechMet.
However, the agency said private investors remained cautious about entering Africa’s rare-earth market because of the risks involved.
“We’re not seeing an influx of private capital,” said one of the officials, speaking on condition of anonymity because the person was not authorised to discuss the matter publicly.
“We’re trying to help projects reach a less risky stage and become attractive to private-sector investment.”
The comments amount to a rare acknowledgement from a US government-backed institution that private financing remains limited despite growing global demand for critical minerals.
