US-Backed Project in South Africa Targets Rare Earths from Mining Waste

An ambitious project in South Africa is aiming to extract valuable rare earth elements from industrial waste, as the United States intensifies efforts to secure critical minerals outside China’s supply chain.

The Phalaborwa Rare Earths Project centres on two massive sand-like dunes at a former chemical processing site, composed of phosphogypsum, a byproduct of earlier mining activity. These waste piles, estimated at 35 million tonnes, are now being seen as a potential source of key materials used in modern technology.

The project has received backing from the US International Development Finance Corporation, which has committed a $50 million equity investment. The funding forms part of a broader US push to reduce reliance on China for rare earth elements, which are essential for products such as electric vehicles, defence systems, robotics and renewable energy technologies.

Development is being led by Rainbow Rare Earths, with investment channelled through TechMet. The company plans to extract elements including neodymium, praseodymium, dysprosium and terbium, which are widely used in high-performance magnets.

Despite tensions between Washington and South Africa, the project has continued to move forward. The diplomatic strain followed an executive order issued by Donald Trump earlier this year halting certain financial assistance to the country. However, US officials have signalled that strategic resource interests remain a priority.

The Phalaborwa initiative is expected to begin production in 2028 and operate for around 16 years. Construction of the processing facility is anticipated to start in early 2027, at which point the DFC funding will be deployed.

Executives involved in the project say the approach could significantly reduce costs compared to traditional mining. Because the material has already undergone processing, including crushing and heating, much of the most expensive work has effectively been completed. The extraction method is also expected to rely heavily on renewable energy, with estimates suggesting up to 90 per cent of power needs could be met through clean sources.

Industry analysts say the project could play an important role in diversifying global supply, though its long-term output remains uncertain. Demand for rare earth elements continues to grow, driven by the expansion of clean energy technologies and advanced manufacturing.

The United States has been increasing its focus on securing access to these materials through both domestic investment and overseas partnerships. Africa has become a key region in this effort, where China has long held a dominant position in mining and mineral processing.

Additional US-supported initiatives include feasibility studies in Mozambique and infrastructure projects such as the Lobito Corridor, aimed at improving export routes for mineral-rich regions.

As global competition for critical minerals intensifies, projects like Phalaborwa highlight the growing importance of alternative supply sources and innovative extraction methods in meeting future demand.