US backs South Africa project to extract rare earths despite diplomatic clash

PHALABORWA, South Africa, April 19, (AP): Two enormous sandlike dunes at an old chemical processing plant in South Africa are at the center of an exploratory US-backed project to extract highly sought-after rare earth elements from industrial mining waste.

The Phalaborwa Rare Earths Project has US support through a $50 million equity investment by the government's International Development Finance Corporation and is part of accelerated US efforts to reduce reliance on economic rival China for the minerals crucial for 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 critical because they are essential for new technologies. The 17 rare earth elements are a subset of them.

US President Donald Trump has made expanding US access to critical minerals, including rare earth elements, a central policy to counter China. The Trump administration said this year it will deploy nearly $12 billion to create its own strategic reserve.

The DFC was created during the first Trump administration and committed its investment in the Phalaborwa project in 2023 under former US president Joe Biden.

The current Trump administration has moved forward with the project despite a major diplomatic rift with South Africa, which began when Trump returned to office and issued an executive order last February to halt all financial assistance to the country.

But the administration has shown that certain economic concerns come first. The DFC has promoted its involvement in the Phalaborwa project as part of a push to unlock Africa's mineral potential "while advancing US strategic interests.”

The Phalaborwa project is being developed by Rainbow Rare Earths. The DFC's investment is through partner TechMet, a company that says it is focused on securing critical mineral supplies for the West. South Africa's government does not have a direct stake in the project.

Rainbow Rare Earths CEO George Bennett told The Associated Press they hope to supply predominantly the US, saying its interest in the project was largely related to defense systems.

The company says it aims to supply the rare earth elements neodymium, praseodymium, dysprosium, terbium and others from its South African project. They are used in high-performance magnets in wind turbines, electric vehicles, defense and emerging applications, including robotics.