Africa-Press. In a rare public acknowledgment, two senior officials at a U.S. development finance institution told a local source that American private sector investors remain largely unwilling to fund rare mineral projects in Africa, despite their strategic importance in reducing U.S. dependence on China, the world’s largest producer, which dominates the global supply chain and tightened export controls over the past two years.
The institution stated that it has committed $62.8 million to rare mineral projects in Malawi, Angola, Madagascar, and South Africa, none of which have reached production stage yet. The majority of this funding, approximately $50 million, went to the Phalaborwa project in South Africa.
One of the officials told the local source, requesting anonymity: “We do not see private capital flowing,” adding, “We are trying to help projects reach a lower-risk stage and become attractive for private sector investment.”
One official explained that private sector investors remain cautious about African rare mineral projects due to their high-risk levels and concerns that Chinese market intervention could undermine prices and project economics. The second official noted that Africa represents about 20% to 25% of the institution’s global investment portfolio.
Analysts also say that many proposed rare mineral projects have limited appeal to investors. Olympia Belsh, head of strategy at a local advocacy group, told the local source: “The announced rare mineral projects far exceed the demand for neodymium-praseodymium magnets.”
Rare minerals are essential for magnets used in electric vehicles, wind turbines, and defense systems, and Washington is increasingly relying on the development finance institution to help establish supply chains for rare minerals, according to the local source.
Between China and the United States
In its report on rare earth elements, the International Energy Agency indicates that China accounted for 60% of global rare mineral production used in magnets in 2024, and 91% of refined production, while its share of magnet manufacturing rose from about 50% in 2005 to 94% in 2024.
In contrast, Washington is seeking to build a domestic supply chain for rare minerals and advanced magnets, from extraction to manufacturing, within its borders. These steps reflect a clear policy to reduce reliance on foreign sources by injecting billions of dollars into American companies such as U.S. Rare Earths, MP Materials, and Phoenix Tailings, aiming to enhance industrial security and American technological capability, and ensure independence in a vital sector directly linked to defense and electronics industries.
In May 2025, the Chinese company Ganchu Chengguang, part of the Shanghai Resources Group, announced a bid to acquire the Australian-listed company Peak Rare Earths for AUD 158 million (approximately USD 113.2 million), which owns 84% of the Ngualla rare mineral project in Tanzania, where Shanghai held a 19.86% stake through its Singapore branch, according to a local source.
The local source reported that an independent committee at Peak Rare Earths concluded that a bid made by an American asset management company, General Innovation Capital Partners, in September 2025, valued at USD 160 million, was not “better” than the existing Chinese offer.
Despite Africa possessing one of the largest untapped treasures of rare minerals, the American presence remains limited and hesitant in the face of China’s growing dominance over the market and supply chains. This disparity reflects not only a gap in investment and risk tolerance but also a broader geopolitical struggle over control of rare minerals that will shape the global economy in the coming decades.
As Beijing continues to strengthen its grip on production and manufacturing, the question remains whether Washington can break this monopoly and build viable alternatives that ensure independence in a sector critical to industrial and defense security.
