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Semafor
20 August 2026

The US International Development Finance Corporation is stepping in to fund rare earths production in Africa as private investors remain reluctant to finance the sector, a key battleground in Washington’s competition with China.  The US has been scrambling to diversify its import of rare earths- vital for tech and defense- the majority of which are produced in China.  Beijing threatened to impose an export ban last year, sending a shudder across US industry.  While Africa holds some of the largest deposits, many are in countries that lack adequate infrastructure, compounding investors’ worries on top of fears that Chinese intervention could subvert project economics, Reuters reported. “We’re trying to help projects reach a more de-risked stage,” a DFC official said.

Reuters
19 August 2026

US steps in to fund African rare earths shunned by private money, sources say
DFC has committed $62.8 million to projects in four African countries
Private investors largely unwilling to fund African rare-earth projects, DFC executives say

DAKAR, Aug 19 (Reuters) – The U.S. International Development Finance Corporation (DFC) is backing a pipeline of ‌African rare-earth projects as private investors remain reluctant to finance the sector, two senior DFC executives told Reuters.  The DFC has committed $62.8 million to rare-earth projects in Malawi, Angola, Madagascar and South Africa, though none has so far reached production, the agency said on Wednesday. Most of that funding- about $50 million- was for ⁠the Phalaborwa project in South Africa backed by Dublin-based mining investor TechMet.

“We do not see private capital coming in,” one of the executives said, requesting anonymity because they were not authorised to discuss the matter publicly. “We’re trying to help projects reach a more de-risked stage and become attractive for private-sector investment.”

In a rare public acknowledgement, the two DFC executives said that private investors remain largely unwilling to fund African rare-earth projects despite their strategic importance in reducing U.S. dependence on top producer China, which ‌dominates ⁠the global supply chain and has over the past couple of years tightened export controls.  Rare earths are essential for magnets used in electric vehicles, wind turbines and defence systems.  The United States is increasingly using the DFC to help develop Western-aligned supply chains for critical ⁠minerals.  One of the DFC executives said private investors remain wary of African rare-earth projects because of their higher risk profile and concerns that Chinese market intervention can undermine pricing and project economics.

Analysts ⁠also say many proposed rare earth projects face uncertain economics and limited investor appetite.  “There are far more announced rare-earth projects than there is demand for neodymium-praseodymium (NdPr) magnets,” ⁠said Olimpia Pilch, head of strategy at advocacy group Critical Minerals Africa.  Africa accounts for roughly 20% to 25% of DFC’s global investment portfolio, the second DFC executive said.