The United States is moving to expand its presence in Madagascar’s critical minerals sector by supporting a rare earths project expected to supply materials used in advanced weapons systems, electronics, and renewable energy technologies, Reuters reported.

Washington’s backing of the Ampasindava project reflects a broader effort to establish mineral supply chains outside China, which currently dominates global rare earth extraction and processing.

The project is owned by London-listed Harena Rare Earths and is estimated to require approximately $150 million to reach development.

Last week, the company announced that the US International Development Finance Corporation had pledged up to $4.84 million to fund pilot plant operations, laboratory analysis and environmental initiatives.

Although the initial commitment represents only a small share of the project’s total cost, Harena believes the support could lay the groundwork for more substantial US financing during the construction phase.

Washington targets China’s mineral dominance

A US State Department spokesperson said the administration was seeking to increase American investment in African mining industries that had previously attracted significant backing from Washington’s competitors.

The strategy was intended to challenge what the spokesperson described as “opaque, predatory investments from our adversaries."

“Madagascar fits within that strategy, and we see opportunities throughout the country to increase U.S. and U.S.-aligned investment in the critical mineral sector,” the spokesperson said in an emailed response to Reuters questions.

Chinese companies have long held a major position in Africa’s copper, cobalt, and lithium industries, while Beijing controls much of the global rare earths market.

China has also imposed export restrictions on certain critical minerals in recent years, demonstrating its ability to influence supply chains essential to the defense, electric vehicle, electronics, and renewable energy sectors.

Minerals critical to weapons production

Ampasindava is an ionic clay deposit containing neodymium, praseodymium, dysprosium, and terbium.

The elements are used to manufacture high-strength permanent magnets required for military technologies, including fighter aircraft and precision-guided weapons, according to Harena.

The company expects the mine to produce roughly 4,000 metric tons of rare earth oxides each year.

Around 1,700 tons of that output would consist of higher-value magnet materials, including neodymium-praseodymium and dysprosium-terbium.

Harena Executive Chair Ivan Murphy said the company had applied for an exploitation permit and expected a decision soon.

Murphy said Harena hopes to secure approval “in the next couple of weeks."

Madagascar’s mines ministry did not immediately respond to requests for comment.

Production targeted for 2028

Harena plans to begin commercial production at Ampasindava by the middle of 2028.

The company is also exploring whether the extracted materials could be refined in the United States or Europe rather than being sent through Chinese-controlled processing networks.

Murphy identified MP Materials, USA Rare Earths, and Belgian chemicals group Solvay as possible future refining partners.

A DFC official said the agency could examine further support for Ampasindava, depending on the completion of due diligence and the receipt of necessary approvals.

The official did not provide details regarding the size or form of any future financing.