U.S. Backs South African Earths Project Despite Rift

U.S. Backs South African Rare Earths Project Despite Diplomatic Rift*

The United States is pushing ahead with a $50 million investment in a South African rare earths project, even as Washington and Pretoria remain locked in a diplomatic clash.

*The project*: The Phalaborwa Rare Earths Project, developed by Rainbow Rare Earths, aims to extract critical minerals from two massive dunes of phosphogypsum — 35 million tons of mining waste left over from decades of phosphate processing. Extraction is set to begin in 2028, with a processing plant scheduled for construction in early 2027. The site is expected to run for 16 years.

*Why it matters*: The dunes contain neodymium, praseodymium, dysprosium, terbium and other rare earth elements used in high-performance magnets for wind turbines, electric vehicles, robotics, and defense systems. Rainbow Rare Earths CEO George Bennett said the company hopes to supply “predominantly the U.S.,” noting American interest is “largely related to defence systems”.

*The U.S. angle*: Funding comes from the U.S. International Development Finance Corporation through partner TechMet, a firm focused on securing critical mineral supplies for the West. The DFC says the deal is meant to “unlock Africa’s mineral potential while advancing U.S. strategic interests”.

The investment was first committed in 2023 under President Biden. The Trump administration is continuing it despite cutting off other financial aid to South Africa. In February 2026, Trump signed an executive order halting all U.S. assistance to the country over policy disagreements.

*Strategic context*: The move fits a broader push to reduce reliance on China, which dominates global rare earth processing. “We do not have enough projects to meet the entire demand outside of China,” said Neha Mukherjee, research manager at Benchmark Mineral Intelligence. Analysts say the U.S. is “trying to catch up” with China in African mining investment.

Rainbow claims Phalaborwa will be cheaper than traditional rare earth mining, using up to 90% renewable energy. Because the waste was already crushed, milled, and heated during phosphate production, much of the costly work is done.

*Key details:*
– *South African government*: Has no direct stake in the project.
– *Cost profile*: Low operational and capital costs, per Benchmark Mineral Intelligence.
– *Other U.S. moves*: The Trump administration has also invested in U.S. critical mineral mining, backed a $1.8M feasibility study for rare earths in Mozambique, and continues support for the Lobito Corridor railway linking Congo and Zambia to the Atlantic.

*Bottom line*: Economic and defense priorities are outweighing diplomacy. Despite a political freeze with Pretoria, Washington is funding Phalaborwa to secure rare earths for U.S. industry and defense — betting that recycling old mining waste can help break China’s near-monopoly.