PHALABORWA, South Africa (AP) — Two giant sand-like mounds at an old chemical processing plant in South Africa are at the center of an exploratory U.S.-backed project for highly demanding extraction. rare earth elements From industrial mining waste.
Phalaborwa Rare Earth Project receives US support through government equity investment of $50 million International Development Finance Corporation And this is part of accelerated American efforts Reduce dependence on economic rival China For minerals critical to making electronic components, robotics, defense systems, electric vehicles and other high-tech products.
Countries have identified dozens of minerals as critical, including copper, cobalt, lithium and nickel because they are essential to new technologies. The 17 rare earth elements are a subgroup of them.
President Donald Trump has made expanding US access to critical minerals, including rare earth elements, a central policy. compete with china. The Trump administration said it will invest about $12 billion this year to build its own strategic reserve.
Project continues despite diplomatic rift
DFC was first created during the Trump administration and committed its investment in the Phalaborwa project in 2023 under former US President Joe Biden.
The current Trump administration is moving forward with the project despite major diplomatic rift With South Africa, that began when Trump returned to office and issued an executive order last February to halt all financial aid to the country.
But the administration has shown that some economic concerns come first. DFC has promoted its involvement in the Phalaborwa project as part of an effort to unlock Africa's mineral potential while “advancing US strategic interests”.
The Phalaborwa project is being developed by Rainbow Rare Earths. DFC's investment is through partner Techmet, a company it says is focused on securing critical mineral supplies for the West. The South African government has no direct stake in this project.
Rainbow Rare Earths CEO George Bennett told The Associated Press that he hopes to supply primarily to the U.S., adding that his interest in the project is largely related to defense systems.
The company says 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 Phalaborwa project aims to begin extracting rare earths from two giant mounds in 2028. The dunes contain 35 million tons of phosphogypsum, a byproduct of mining waste and the processing of phosphate rock for acid and fertilizer production.
Rainbow Rare Earths said the project is expected to operate for 16 years. The $50 million injection from the DFC will only be used when Rainbow Rare Earths begins construction of its processing factory in Phalaborwa in early 2027.
Rare earths are relatively common, but are usually found in low concentrations and are difficult to isolate, making them expensive to mine.
Neha Mukherjee, research manager at Benchmark Mineral Intelligence, said that although the Phalaborwa project was unique, with its experimental above-ground mineral extraction process, its potential remained unknown.
“It appears to be a fairly low-cost asset in terms of operating costs,” he said. “Even the capital requirement is not very high… which is a good sign.”
Mukherjee said the project is important because “we don't have enough projects to meet the entire demand outside China.”
America is 'trying to catch up'
Rainbow Rare Earths says mineral extraction from the dunes will use up to 90% renewable energy and will be significantly less expensive than normal rare earth mining.
Bennett said Phalaborwa will be a low-cost producer compared to Chinese producers.
“(The former owners) crushed it, they ground it, they put energy into it, they put heat into it, all of this was done to create phosphogypsum, which is necessary to make rare earths,” said Alberto Brutomso, director of the Rainbow Rare Earths project, referring to the processes the waste previously went through. “Heating is the most expensive part of the process. It costs the most money.”
The Trump administration has also invested Critical Mineral Mining in America and have struck deals to ensure access to these minerals, including with foreign countries in Ukraine. Greenlandic rare earth This is why Trump wants to acquire Arctic islands.
The Phalaborwa project is one of several mineral projects in Africa with DFC investment.
Patience Mususa, a mining expert at the Nordic Africa Institute in Sweden, said the US is “trying to catch up in terms of investment in mining” on the African continent, where China is the dominant player in mining.
In February, the US Trade and Development Agency signed a formal agreement to provide $1.8 million for a feasibility study at the Monte Muambe rare earth project in Mozambique.
The Trump administration is also continuing US financial assistance to Africa Lobito CorridorBiden administration initiative to build 800-mile (1,290-kilometer) railway linking Congo's Mineral Rich Regions and from Zambia to the Atlantic coast of Africa.