The US International Development Finance Corporation (DFC) is backing a pipeline of African rare-earth projects in an effort to reduce investment risks and attract private capital to a sector considered strategically important to Washington, Reuters reported.
The agency has committed $62.8m to projects in Malawi, Angola, Madagascar and South Africa, although none has yet entered production.
About $50m of the DFC funding is tied to the Phalaborwa rare-earth project in South Africa, backed by Dublin-based mining investor TechMet.
DFC executives said private investors remain reluctant to finance African projects because of their higher risk profiles, uncertain economics and concerns that Chinese intervention in global markets could weaken prices and returns.
The financing reflects a broader US push to establish Western-aligned critical-mineral supply chains and reduce reliance on China – the world’s dominant rare-earth producer.
China’s tightening of export controls has added urgency to those efforts. Rare earths are crucial for permanent magnets used in electric vehicles, wind turbines and defence systems.
Still, analysts question whether all proposed projects will prove commercially viable.
Olimpia Pilch, head of strategy at Critical Minerals Africa, said the number of announced rare-earth projects exceeds projected demand for high-strength rare-earth magnets.
DFC executives said their role is to help projects reach a sufficiently de-risked stage to attract commercial investors.
Africa currently represents roughly 20% to 25% of the agency’s global investment portfolio.
