US Backs US$150M Madagascar Rare Earths Mine to Curb China
MADAGASCAR · CRITICAL MINERALS
Key Facts
—The commitment: The US International Development Finance Corporation has committed up to US$4.48 million to the Ampasindava rare earths project.
—What it pays for: Pilot-plant work, laboratory testing and environmental programmes, with the door left open to larger funding later.
—The project: London-listed Harena Rare Earths owns and is developing Ampasindava, a scheme put at roughly US$150 million.
—The metals: The ionic clay deposit holds neodymium, praseodymium, dysprosium and terbium.
—The output: About 4,000 tonnes of rare earth oxides a year, including 1,700 tonnes of high-value magnet metals.
—The timetable: Harena is seeking an exploitation permit and targets production by the middle of 2028.
—Where it would be refined: The company is weighing options in the United States and Europe, naming MP Materials, USA Rare Earths and Solvay.
Madagascar rare earths have drawn direct American money, with Washington’s development finance agency committing up to US$4.48 million to the Ampasindava project. Reuters reported the decision on 28 July, and the State Department has framed it plainly as a move against China’s grip on magnet metals.
What Washington has put into Madagascar rare earths
The US International Development Finance Corporation has committed up to US$4.48 million to Harena Rare Earths for work at Ampasindava, the company said last week. The money funds a pilot plant, laboratory testing and environmental programmes.
By the standards of mine finance that is a rounding error. The project itself is put at roughly US$150 million, and the agency has said it could consider more, subject to due diligence and approvals.
What makes it worth reading is the label attached. A State Department spokesperson told Reuters that Washington’s critical minerals strategy in Africa aims to increase American investment in sectors long shaped by “opaque, predatory investments from our adversaries”.
What is in the ground at Ampasindava
The deposit is ionic clay, a type that can often be processed more cheaply than hard-rock ore. It contains neodymium and praseodymium, and crucially also dysprosium and terbium.
Those last two are the heavy rare earths that keep a permanent magnet working when it heats up. Without them a magnet fails in the places that matter most, from electric motors to guidance systems.
Harena expects about 4,000 tonnes of rare earth oxides a year, of which some 1,700 tonnes would be the magnet metals. The company points directly at defence uses, including fighter jets and precision-guided missiles.
The language Washington is now using
For years the story of African mining finance was Chinese capital in copper, cobalt and lithium, with Western investors largely absent. That has begun to change, and rare earths are where the shift is clearest.
China dominates both the mining and, more decisively, the processing of these metals, and it has used export controls to make the point. Every restriction it imposes raises the strategic value of a deposit outside its reach.
The result is that a modest grant now arrives wrapped in the vocabulary of great-power competition. That framing is itself part of the offer to host governments.
The permit that has to come first
Harena’s executive chair told Reuters the company was seeking an exploitation permit and hoped for approval within a couple of weeks. Madagascar’s mines ministry did not respond to questions.
Nothing else moves until that is signed. A pilot plant and a laboratory programme are preparation, not construction.
Madagascar also has to decide what it wants from the deal beyond royalties, at a moment when African producers are pressing to keep more processing at home rather than shipping concentrate abroad.
Two continents, the same courtship
Readers who follow Latin America will recognise the pattern immediately. Brazil has spent the past year fielding rival approaches from Washington, Brussels and Beijing over its own rare earth reserves, with the same arguments about supply security.
The difference in Madagascar is scale and stage. Brazil is negotiating over assets that already exist; Ampasindava is still asking permission to be built.
For investors watching both regions, the useful signal is not the size of the cheque but who is writing it, and what they say while doing so.
Why a small cheque is worth watching
Development finance agencies rarely lead with money. They lead with validation, which is what lets private capital follow into a jurisdiction it would otherwise avoid.
The honest caveat is that mid-2028 is a target, not a schedule, and that refining partnerships in the United States and Europe are being evaluated rather than agreed. Plenty of projects have died between a pilot plant and a mine.
But the direction is unmistakable. Africa’s rare earths are being bought into, deposit by deposit, by everyone except the country that currently controls the market.
Frequently Asked Questions
How much has the United States committed to Madagascar rare earths?
The US International Development Finance Corporation has committed up to US$4.48 million to the Ampasindava project. The money covers pilot-plant work, laboratory testing and environmental programmes.
Who owns the Ampasindava project?
London-listed Harena Rare Earths owns and is developing the roughly US$150 million project. It is seeking an exploitation permit from Madagascar’s authorities.
What metals does Ampasindava contain?
The ionic clay deposit holds neodymium, praseodymium, dysprosium and terbium. All four go into the permanent magnets used in electric vehicles, wind turbines, electronics and defence systems.
When could the mine start producing?
Harena is targeting production by mid-2028. It expects about 4,000 tonnes of rare earth oxides a year, including 1,700 tonnes of high-value magnet metals.
Connected Coverage
This is the second Western move on African rare earths in a week, and it belongs to the story we track in Africa: The New Scramble. We reported earlier on the US and China racing for minerals in Namibia and Niger, and on the Latin American mirror when Lula told Trump to worry about Brazil’s rare earths.
Sources: US International Development Finance Corporation; Harena Rare Earths; Reuters.
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