PHALBORWA, South Africa (AP) — Two large sand-like dunes at a former chemical processing plant in South Africa are at the center of a U.S.-backed exploration project to extract highly sought-after rare earth elements from industrial mining waste.
The Falborwa rare earth project has U.S. support through a $50 million equity investment from the government’s International Development Finance Corporation and is part of accelerating U.S. efforts to reduce dependence on economic rival China for minerals vital to making electronic devices, robotics, defense systems, electric vehicles and other high-tech products.
Countries have identified dozens of minerals, including copper, cobalt, lithium and nickel, as important because they are needed for new technologies. The 17 rare earth elements are a subset of them.
President Donald Trump has made a central policy to counter China, expanding US access to key minerals, including rare earth elements. The Trump administration has said it will spend about $12 billion this year building up its strategic reserve.
Despite the diplomatic controversy, the project continues
DFC was first created during the Trump administration and invested in the Phalaborwa project in 2023 under the leadership of former US President Joe Biden.
The current Trump administration has pushed ahead with the project despite a major diplomatic rift with South Africa, which began after Trump returned to office and issued an executive order last February to freeze all financial aid to the country.
But the administration has shown that some economic concerns come first. DFC promoted its involvement in the Falborwa project as an effort to unlock Africa’s mineral potential “advancing US strategic interests.”
Falborwa project is being developed by Indreni Rare Earths. DFC’s investment partner is through TechMet, a company that says it is focused on securing critical mineral supplies for the West. The South African government has no direct stake in this project.
Rainbow Rare Earth CEO George Bennett told The Associated Press that while they hope to supply primarily the U.S., its interest in the project is largely related to defense systems.
The company said it aims to supply rare earth elements neodymium, praseodymium, dysprosium, terbium and others from its South African project. They are used in high-performance magnets in emerging applications including wind turbines, electric vehicles, defense and robotics.
The Phalborwa project aims to extract rare earths from two large dunes by 2028. Those dunes contain 35 million tons of phosphogypsum, a byproduct of mining waste and the processing of phosphate rock for acid and fertilizer production.
The project is expected to run for 16 years, Rainbow Rare Earth said. The $50 million injection from DFC will be used only once Rainbow Rare Earth begins construction of its processing plant in Phalaborwa, expected in early 2027.
Rare earths are relatively common but usually in low concentrations and difficult to separate, making their mining expensive.
Neha Mukherjee, research manager at Benchmark Mineral Intelligence, said that while the Phalborwa project was unique, its potential was unknown due to its experimental above-ground mineral extraction process.
“It appears to be a very low-cost asset in terms of operating costs,” she said. “The capital requirement is also not high … which is a good sign.”
Mukherjee added that the project is important because “we don’t have enough projects outside of China to meet the entire demand.”
US ‘trying to get by’
Rainbow Rare Earth says mining the minerals from the dunes will use 90% renewable energy and will be much less expensive than conventional rare earth mining.
Bennett said Falborva will be a low-cost producer compared to Chinese producers.
“(The former owners) crushed it, they mixed it, they put energy on it, they put heat on it, to make all that phosphogypsum, which is needed to make rare earths,” said Alberto Brutomesso, Rainbow Rare Earth’s project director, referring to previous waste processing. “Heating is the most expensive part of the process. It costs the most money.”
The Trump administration has also invested in critical mineral mines in the U.S. and struck deals to secure access to these minerals abroad, including in Ukraine. Greenland’s rare earths are the reason Trump wants to acquire the Arctic island.
The Phalaborwa project is one of several mineral projects in Africa in which DFC has invested.
Patience Mususa, a mining expert at Sweden’s Nordic Africa Institute, said the US is “looking to invest in mining” on the African continent, where China is a major mining player.
In February, the US Trade and Development Agency signed a formal agreement to provide $1.8 million for a feasibility study on the Monte Muambe rare earth project in Mozambique.
In Africa, the Trump administration has also continued US financial support for the Lobito Corridor, the Biden administration’s initiative to build an 800-mile (1,290-kilometer) railway linking the mineral-rich regions of Congo and Zambia to Africa’s Atlantic coast.
