Keypoints:
- DFC commits up to $4.84m
- Production targeted for mid-2028
- Refining route remains undecided
THE United States is supporting Madagascar’s Ampasindava rare-earth project as Washington seeks alternative sources of strategic minerals used in electric vehicles, renewable-energy systems, electronics and defence equipment.
The initial commitment is small beside the mine’s projected development cost, but it carries wider geopolitical significance. Ampasindava could become a Western-aligned source of magnet rare earths while testing whether Madagascar can secure lasting domestic value from intensifying competition for African minerals.
US funding opens the door
Harena Rare Earths said the US International Development Finance Corporation had committed up to $4.84m for permitting, environmental and social studies and a proof-of-concept pilot plant.
The figure in Harena’s July 22, 2026 regulatory filing differs from the $4.48m reported by Reuters. The company filing, the primary corporate disclosure, says drawdown has begun and that the funds will support work towards a definitive feasibility study and construction decision.
The DFC retained the right to be considered for a larger financing or investment role. Harena stressed that no further amount had been agreed and that any additional involvement would remain subject to the agency’s due diligence and approval processes.
According to Reuters, the State Department views the project as part of a strategy to increase US and allied investment in African mining sectors dominated by strategic rivals.
A spokesperson accused those rivals of relying on ‘opaque, predatory investments’, an allegation reflecting Washington’s increasingly confrontational position towards China.
The approach complements American backing for the Lobito Corridor as an alternative minerals route from Central and Southern Africa to the Atlantic.
Small commitment, larger ambition
Harena’s pre-feasibility study estimates pre-production capital costs at $142m. The DFC commitment therefore covers only a fraction of the money required to build the operation, but it could lower early-stage risk by supporting technical, regulatory and environmental work.
The company projects annual production of about 4,000 tonnes of total rare-earth oxides, including 1,700 tonnes of neodymium-praseodymium and dysprosium-terbium oxides, over a planned 20-year operating life.
Its pre-feasibility study puts total rare-earth oxide output at about 71,000 tonnes over the modelled mine life, although no mineral reserve had been estimated at that stage.
Those figures remain projections. The company still needs an exploitation permit, further technical studies, construction finance, a processing route and a final investment decision before commercial production can begin.
Harena is targeting a mid-2028 start. Madagascar’s mines ministry did not respond to request for comment on the development or the pending permit.
China controls the vital bottleneck
Ampasindava’s ionic-clay deposit contains neodymium, praseodymium, dysprosium and terbium. These elements are important inputs for high-performance permanent magnets used in electric vehicles, wind turbines, industrial motors, data centres, aerospace systems and defence equipment.
The strategic challenge extends beyond extracting the minerals. The IEA estimates that China accounted for 91 percent of global magnet rare-earth refining and 94 percent of permanent-magnet manufacturing in 2024.
That concentration gives Beijing influence over the technically demanding stages where mixed rare-earth material is separated, refined and converted into metals, alloys and magnets. Chinese export controls have demonstrated the vulnerability of manufacturers that lack alternative suppliers.
Harena is considering processing in the US or Europe and has named MP Materials, USA Rare Earth and Solvay among possible refiners. No processing partnership has been confirmed.
A dependable refining arrangement will be decisive. Without one, Ampasindava could produce mineral concentrate without creating the integrated, non-Chinese supply chain Washington wants.
Madagascar faces a value test
Growing competition for African minerals could strengthen the negotiating position of producing countries, but geopolitical attention does not automatically guarantee stronger development outcomes.
Madagascar will need to assess taxation, employment, procurement, skills transfer, community consultation, land rights, water management and rehabilitation obligations. The central question is how much value will remain in the country if the highest-value separation and refining activities take place abroad.
That challenge mirrors the wider continental debate examined in Africa Briefing’s analysis of Africa’s growing leverage in the minerals race and the need for governments to set stronger terms for strategic-mineral investment.
Environmental scrutiny will also be critical. The wider Ampasindava Peninsula contains a 166,800-hectare protected landscape recognised as a key biodiversity area, with forests, mangroves and threatened endemic species.
The available public sources reviewed do not establish whether the proposed mining area overlaps the protected zone. Regulators must therefore determine how the operation could affect forests, water sources and communities that depend on fishing and cash crops, rather than relying solely on the developer’s environmental assurances.
What happens next?
Ampasindava must still secure its exploitation permit, complete pilot and environmental work, choose a refining route and raise the capital needed for construction.
The US commitment gives the project political momentum, but not a guaranteed path to production. Its progress will show whether Western-backed mining can deliver an alternative supply chain while giving an African host country more than another source of raw exports.
