The U.S. International Development Finance Corporation (DFC) has committed $62.8 million to rare-earth projects in Malawi, Angola, Madagascar and South Africa, according to sources familiar with the matter. The funding, disclosed Tuesday, aims to advance projects that have struggled to secure private capital amid elevated risk perceptions and concerns over China’s tightening export controls.
About $50 million of the total allocation will support the Phalaborwa project in South Africa, backed by Dublin-based mining investor TechMet. The DFC’s investments in Africa now represent roughly 20% to 25% of its global portfolio, reflecting a strategic push to diversify critical mineral supply chains outside China’s dominant position in the sector.
None of the funded projects have yet reached production, and private investors remain cautious due to Africa’s higher risk profile, according to an anonymous DFC executive. The agency stated it is working to de-risk projects to make them more attractive for future private-sector participation. Olimpia Pilch, head of strategy at advocacy group Critical Minerals Africa, noted that demand for neodymium-praseodymium (NdPr) magnets, essential for electric vehicles, wind turbines and defense systems, has not matched the volume of announced projects.
China, the world’s top producer, has tightened export controls in recent years, further complicating market access for new entrants. The DFC’s intervention underscores broader efforts by Western governments to bolster alternative supply chains amid geopolitical tensions and supply chain vulnerabilities.
