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The United States has committed $50 million to the Phalaborwa Rare Earths Project in northern Limpopo, even as relations with South Africa remain at one of their lowest points in decades. The investment, through the U.S. government's International Development Finance Corporation, reflects Washington’s push to secure access to minerals it considers vital for defence, electric vehicles, robotics and other advanced technologies.
The project is being developed by Rainbow Rare Earths at the site of a former chemical plant, where two large dunes of phosphogypsum hold valuable rare earth elements. Rather than conventional mining, the company plans to process industrial waste and recover minerals from material that was already crushed, milled and heated during the plant’s earlier operations.
Production is expected to begin in 2028, with construction of the processing plant due to start in early 2027. The project is expected to run for 16 years and could use up to 90% renewable energy, while supplying rare earths such as neodymium, praseodymium, dysprosium and terbium mainly to Western markets, including the United States.
The deal comes after Donald Trump returned to office and ordered a halt to financial assistance to South Africa, underlining that economic interests have outweighed the diplomatic freeze. The DFC has described its role in the project as part of a wider effort to unlock Africa’s mineral potential while advancing U.S. strategic interests, and the Phalaborwa venture is one of several mineral projects on the continent backed by U.S. funding.
