US commits $4.84M pilot funding to a $150M Madagascar rare-earths project

The US International Development Finance Corporation has committed up to $4.84 million to a $150 million rare-earths project in northern Madagascar, pilot money for a deposit the State Department wants to position inside its counter-China minerals push. The mine's exploitation permit is still pending, and its first oxide isn't targeted until mid-2028.

The DFC, the US government's development-finance arm, signed the project-development funding agreement with London-listed Harena Rare Earths Plc last week. The tranche covers pilot-plant work, laboratory testing, and environmental programs at the Ampasindava project, on an island better known for vanilla and nickel. The $150 million figure is Harena's total project envelope, not the DFC's check, and a DFC official told Reuters that any further US support is "subject to due diligence and approvals."

The mineral mix is what gives the project strategic weight. The deposit carries the four rare earths that go into the strongest permanent magnets: neodymium and praseodymium, which together form the "NdPr" alloy used in EV traction motors and wind-turbine generators, plus dysprosium and terbium, the additives that let those magnets hold their strength at high temperatures inside fighter-jet actuators and precision-guided munitions. Harena has said it targets roughly 4,000 metric tons of rare-earth oxides a year, including about 1,700 tons of high-value magnet materials. Those are company goals, not realized output, and both targets depend on the permit Madagascar has not yet issued.

A State Department spokesperson told Reuters the project "fits within" a US strategy to expand US-aligned investment in African critical minerals and reduce reliance on supply chains shaped by "opaque, predatory investments from our adversaries." That characterization belongs to the State Department, not this article. What is independently on the record: Chinese firms have spent years and billions of dollars building dominant positions in Congolese cobalt and copper, and Beijing has introduced export controls on a growing list of critical minerals, including rare earths.

The Madagascar pilot is the smallest of three Africa plays the DFC is now actively weighing. The agency is also reviewing an equity stake in a copper-and-cobalt venture between Gecamines, the DR Congo state miner, and Mercuria, the Swiss commodity trader, a project that would sit alongside the Lobito Corridor rail-and-port route the US has been pushing to keep Central African minerals moving toward Atlantic rather than Chinese-controlled ports. A US-DRC Strategic Partnership Agreement signed in December 2025, covering transport infrastructure and critical-minerals investment, gives that broader bet its diplomatic scaffolding.

For the Madagascar numbers to matter, two things have to happen that have not yet happened. Harena still needs Madagascar's exploitation permit, and the project still needs to convert the DFC's pilot funding into the construction financing that would build an actual mine. The DFC's pipeline model often starts this way, with an early-stage tranche and follow-on capital after due diligence, which means the pilot is a credible start, not a token one. The next read-through is whether a follow-on DFC commitment, or a separate US-aligned offtake or strategic-investor package, shows up before the mid-2028 production target. Global Mining Review confirmed the project-development agreement, and Harena's own filings show the company has been raising equity alongside the DFC tranche to keep the pilot moving.