Washington Bets on Madagascar to Break China’s Grip on Rare Earths
The US State Department has thrown its weight behind a rare earths mine on Madagascar’s northern coast, marking one of Washington’s clearest moves yet to challenge China’s dominance over the minerals that power everything from electric vehicles to fighter jets.
The Ampasindava project, developed by London-listed Harena Rare Earths, sits on an ionic clay deposit valued at roughly $150 million. It is rich in neodymium, praseodymium, dysprosium and terbium — elements essential for the permanent magnets used in wind turbines, EV motors and precision-guided missile systems. Harena expects the mine to produce about 4,000 metric tons of rare earth oxides a year once it reaches full production, targeted for around 2028.
The backing comes through the US International Development Finance Corporation, which has committed up to $4.48 million for pilot plant work, laboratory testing and environmental studies. It is a modest sum on its own, but it is designed to unlock much larger financing down the line and signal to private investors that Washington sees the project as strategically important.
A State Department spokesperson framed the move as part of a broader campaign to counter what officials called “opaque, predatory investments from our adversaries” in Africa’s mining sector — a pointed reference to China, which has spent two decades building near-total control over rare earth mining and, more importantly, the processing infrastructure that turns raw ore into usable magnet material. Beijing has periodically wielded export restrictions on these minerals as geopolitical leverage, rattling manufacturers and defence planners in Washington and Brussels alike.
Madagascar is not alone in attracting this new wave of interest. Pensana Rare Earths is advancing a 20,000-ton-per-year project at Longonjo in Angola and is pursuing a Nasdaq listing after already trading in London, while also lining up a $160 million loan from the US Export-Import Bank. Both Harena and Pensana have cited strong American investor appetite for African rare earth assets as they chase Western capital and offtake deals — Pensana has already struck a supply partnership with magnet producer VAC to feed a planned US manufacturing base.
For Madagascar, a country still climbing back from years of political instability and chronic underinvestment in its resource sector, the deal offers a rare chance to plug into a supply chain the US and its allies are racing to build outside China’s orbit. But the road from a $4.48 million pilot programme to a fully operational mine remains long, and history is littered with African critical mineral projects that stalled on financing, infrastructure or permitting long before production began.
What is different this time is the geopolitical urgency behind the money. China’s dominance is not simply about who owns the deposits — it is about who controls the separation and processing plants that convert clay and ore into strategically usable oxides. Analysts tracking the sector note that the next real contest in rare earths will not be over new discoveries but over who finances the midstream capacity to process them. For now, Ampasindava gives Washington a foothold, and gives Madagascar a seat at a table it has rarely been invited to.