US Supports South Africa Rare Earths Project

The United States is backing the Phalaborwa Rare Earths Project in South Africa with a $50 million investment through the International Development Finance Corporation (DFC). This initiative aims to extract rare earth elements (REEs) from industrial mining waste, specifically phosphogypsum stacks, to reduce global dependence on China for these critical minerals. The project is scheduled to begin extraction in 2028 and is expected to operate for 16 years.

Rare Earth Elements and Their Importance

1. Rare earth elements comprise 17 chemically similar metals essential for manufacturing high-tech products such as electronics, electric vehicles, wind turbines, robotics, and defence systems.
2. Key REEs targeted in the Phalaborwa project include neodymium, praseodymium, dysprosium, and terbium, which are vital for producing high-performance magnets.
3. Despite their name, rare earths are relatively abundant but occur in low concentrations, making extraction and separation complex and costly.

Phalaborwa Project and Extraction Process

1. The project utilises phosphogypsum, a byproduct of phosphate rock processing, stored as large sand-like dunes containing approximately 35 million tons of material.
2. Extraction will employ an innovative above-ground mineral recovery process, expected to be low-cost and powered by up to 90% renewable energy.
3. The $50 million DFC investment will be deployed when construction of the processing plant begins, anticipated in early 2027.

Geopolitical and Economic Context

1. The US aims to diversify its supply chain for critical minerals, reducing reliance on China, which currently dominates global rare earth production and processing.
2. The DFC’s investment aligns with broader US strategic interests in Africa, where China has significant mining investments.
3. Despite diplomatic tensions between the US and South Africa, economic and strategic priorities have driven continued support for mineral projects.
4. Other US-backed initiatives in Africa include feasibility studies for rare earth projects in Mozambique and infrastructure projects like the Lobito Corridor railway linking mineral-rich regions to ports.

Critical Minerals and Global Supply Chains

1. Critical minerals such as copper, cobalt, lithium, nickel, and rare earths are essential for emerging technologies and the green energy transition.
2. Countries worldwide are investing in securing these minerals to support defence, technology, and clean energy sectors.
3. The US has announced plans to build a strategic reserve of critical minerals, with investments exceeding $12 billion.

The Phalaborwa Rare Earths Project represents a strategic effort to develop alternative sources of critical minerals outside China. The project’s innovative use of mining waste and renewable energy could set a precedent for sustainable mineral extraction. Rare earth elements remain central to technological advancement and global economic security.