U.S. government commits $4.84 million to Madagascar rare earths project to counter China’s critical minerals dominance

The U.S. government just put money behind a rare earths project in Madagascar—$4.84 million through the International Development Finance Corporation, directed at the Ampasindava deposit owned by London-listed Harena Rare Earths. The State Department confirmed the move publicly, framing it as part of Washington’s push to counter what it called “opaque, predatory investments” by rivals in Africa’s critical minerals sector.

The project carries a total estimated cost of around $150 million, and it sits at the center of a widening contest over supply chains that China currently dominates—one the U.S. is now actively working to reshape.

US backs Madagascar rare earths project with initial DFC funding

The DFC’s commitment covers pilot plant work, lab testing, and environmental programs—foundational work that sets the stage for larger investment decisions down the line. Harena Rare Earths, listed on the London Stock Exchange, owns and develops the project.

and Europe—Murphy named MP Materials, USA Rare Earths, and Solvay as potential refining partners, companies with distinct profiles on either side of the Atlantic.

The State Department confirmed that Madagascar fits within Washington’s Africa critical minerals strategy. A spokesperson told Reuters the U.S. sees “opportunities throughout the country to increase U.S. and U.S.-aligned investment in the critical mineral sector.” The DFC added it could consider additional support for Ampasindava, though any further financing would go through due diligence and formal approvals first.

The initial $4.84 million is a relatively small figure. In rare earth development—where projects often struggle to attract rare earth financing at all—it signals a real shift in how the U.S. is engaging with African mineral development.

Why the US is investing: Countering China’s supply chain control

China’s grip on rare earth supply chains is the clearest reason Washington is paying attention to a project in a country most Americans couldn’t locate on a map. China dominates both the mining and processing of rare earth elements globally, and in recent years it’s used export controls to reinforce that dominance—sending a clear message to Western governments about what supply chain dependence actually costs.

The State Department’s language was direct. It described its Africa minerals strategy as a response to “opaque, predatory investments from our adversaries,” a phrase that leaves little doubt about who Washington has in mind. Chinese companies have long led investment in African copper, cobalt, and lithium. Western-backed rare earth projects are now emerging as a deliberate counterweight.

Madagascar specifically appears on Washington’s radar as a place where U.S.-aligned investment can take root. Ampasindava gives the U.S. a concrete foothold in a sector where it’s historically been outmaneuvered.

What Ampasindava contains and why it matters

The deposit’s value comes down to what’s inside it. Ampasindava is an ionic clay deposit rich in neodymium, praseodymium, dysprosium, and terbium—four elements at the heart of permanent magnet manufacturing. These magnets are essential components in electric vehicles, wind turbines, and consumer electronics. They’re also critical for defense. Harena notes that these elements go into fighter jets and precision-guided missile systems, which puts Ampasindava squarely in the category of strategic national interest for the U.S. military and its allies.

On the production side, the project is expected to generate around 4,000 metric tons of rare earth oxides per year. Of that, approximately 1,700 tons would be the higher-value rare earth magnets—specifically NdPr and DyTb—which command stronger market prices and considerably greater strategic importance.

Harena is currently seeking an exploitation permit from Madagascar’s mines ministry. Executive Chair Andrew Murphy told Reuters the company hopes to secure that approval within weeks, which would clear a key regulatory hurdle before the next development phase begins.

Production timeline and refining partnership options

Harena is targeting a production start at Ampasindava by mid-2028. That’s a tight timeline for a project still in the permitting phase, but it reflects the company’s intent to move fast once key approvals and financing are in place.

Where the ore gets refined remains an open question. Harena is evaluating options in both the U.S. and Europe—Murphy named MP Materials, USA Rare Earths, and Solvay as potential refining partners, companies with distinct profiles on either side of the Atlantic. The company appears to be keeping its options open rather than locking into a single geography early.

Murphy was candid about what the DFC commitment means beyond its dollar value. He told Reuters the initial funding could open the door to substantially larger U.S. backing as the project moves toward construction. In rare-earth development, early government endorsement often functions as a signal to private investors that a project has cleared a basic credibility threshold—and that signal tends to travel.

Broader context: Africa’s shifting critical minerals landscape

Ampasindava doesn’t exist in isolation. Across Africa, the critical minerals sector is going through a genuine realignment, with Western governments—led by the U.S. but including European partners—actively building supply chains that don’t run through Beijing.

Rare earths have become a focal point of that effort, given how deeply both clean energy manufacturing and defense production depend on them. The stakes extend well beyond commodity markets.

The DFC’s initial $4.84 million commitment to Ampasindava is modest by any measure. But it’s a stated signal of intent—one that could scale significantly if Harena hits its milestones and secures its permits. The key facts right now: the U.S. government has formally backed a rare earths project in Madagascar, the State Department has named it part of a deliberate Africa minerals strategy, and a mid-2028 production target is on the table pending regulatory approval and continued financing.

Kelly Lippke

Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.