**US Backs $150 Million Rare Earths Project in Madagascar to Counter China’s Dominance**
The United States is investing in a $150 million rare earths project in Madagascar, aiming to enhance its presence in Africa's critical minerals sector and reduce reliance on supply chains dominated by China. This initiative, reported by Reuters and confirmed by a State Department spokesperson, aligns with Washington's broader strategy to bolster investments in African mining, which has historically been influenced by opaque and predatory investments from rival nations.
The U.S. International Development Finance Corporation (DFC) has committed approximately $4.84 million to support pilot-plant operations, laboratory testing, and environmental programs at the Ampasindava project. The project's developer, Harena Rare Earths, announced the funding last week, indicating that this initial investment could lead to further financial support as the project progresses toward construction.
The Ampasindava project is significant due to its potential output of rare earth elements, including neodymium, praseodymium, dysprosium, and terbium. These materials are critical for manufacturing permanent magnets used in various applications, such as fighter jets, precision-guided missiles, electric vehicles, wind turbines, and consumer electronics. Harena anticipates producing around 4,000 metric tons of rare earth oxides annually, with a substantial portion dedicated to high-value magnet materials. The company is currently seeking an exploitation permit and aims to initiate production by mid-2028.
The U.S. strategy in Madagascar is part of a broader effort to increase investments in critical minerals across Africa. A State Department spokesperson emphasized the importance of Madagascar within this strategy, highlighting the opportunities for U.S. and allied investments in the country’s mineral sector.
China's dominance in the global rare earth market poses a challenge for the U.S., especially as the Asian nation has implemented export controls on several critical minerals in recent years. By investing in projects like Ampasindava, the U.S. aims to secure a more stable and diversified supply chain for these essential materials.
In addition to Madagascar, the DFC is exploring mineral investments in other African nations. In the Democratic Republic of Congo (DRC), the agency is considering an equity investment in a partnership between state miner Gecamines and commodities trader Mercuria to commercialize copper, cobalt, and other minerals. This comes in response to the significant investments made by Chinese companies in the Congolese mining sector, particularly in cobalt and copper.
Furthermore, the U.S. has established a Strategic Partnership Agreement with the DRC, signed in December 2025, which aims to enhance American access to Congolese minerals and improve transport infrastructure, including the Lobito Corridor that connects mining regions to Angola's Atlantic coast.
Other notable U.S.-backed projects include the Balama graphite mine in Mozambique and the Songwe Hill rare earths development in Malawi. The DFC is also looking to invest $50 million in South Africa’s Phalaborwa project, despite existing diplomatic tensions with the South African government.
However, Washington's push for increased mineral investments in Africa has not been without criticism. Congolese activist Gentil Mulume has expressed concerns that the agreements between the U.S. and DRC may perpetuate "structurally unbalanced partnerships," where the DRC continues to serve as a supplier of raw materials for Western powers without benefiting from local processing and value addition.
Similarly, South African President Cyril Ramaphosa has cautioned against allowing critical mineral extraction to replicate colonial-era patterns of exploitation. He has urged African nations to prioritize local processing and beneficiation of their mineral resources to ensure that the benefits of extraction are shared more equitably within the continent.
As the U.S. seeks to expand its role in Africa's critical minerals sector, the Ampasindava project in Madagascar represents a significant step in diversifying supply chains and reducing dependency on China, while also navigating the complex dynamics of international investment and local resource management.