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Despite a diplomatic clash, the US is investing in an experimental South African rare earths project

The $50 million equity stake will fund a rare earths plant that aims to supply magnets and defense systems, company officials said.

  • The U.S. government's International Development Finance Corporation is backing the Phalaborwa Rare Earths Project in South Africa with a $50 million investment to extract critical minerals from industrial waste and reduce reliance on China.
  • President Donald Trump has made expanding U.S. access to critical minerals a central policy to counter China, pledging nearly $12 billion this year to create a strategic reserve targeting 35 million tons of phosphogypsum waste.
  • Rainbow Rare Earths aims to start extraction in 2028, with factory construction anticipated in early 2027, using up to 90% renewable energy to significantly lower costs compared to traditional mining.
  • Despite a major diplomatic rift with South Africa that began when Trump issued an executive order last February halting aid, the administration has prioritized the project, showing economic concerns supersede political tensions.
  • Beyond Phalaborwa, the U.S. continues supporting other African mineral projects, including the Lobito Corridor railway linking Congo and Zambia. Mining specialist Patience Mususa said the U.S. is "trying to catch up in terms of investment in mining.
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The Record broke the news in Waterloo, Canada on Sunday, April 19, 2026.
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