Will diplomatic strain impact SA’s REE future?

Will diplomatic strain impact SA’s REE future?

How will tensions between the US and South Africa affect Phalaborwa’s REE project?

By Leon Louw founder of WhyAfrica and editor of the WhyAfrica magazine

I’ve been following the Rainbow Rare Earths Project close to Phalaborwa in the Limpopo Province of South Africa with interest since the company signed a co-development agreement with Bosveld Phosphates in 2020 to extract Rare Earth Elements (REEs) from historic phosphogypsum stacks,

In November 2023 the United States invested USD50-million into this unique project through the U.S. International Development Finance Corporation’s (DFC) equity commitment into TechMet, a US and UK backed investment firm focused on developing and financing critical metals projects essential to the global energy transition.

But with South African and U.S. relations on tender footing, does the future of projects like the Rainbow Rare Earths initiative face uncertainty?

Uncertainty about funding  

While U.S. equity investment remains on track, several analysts and media outlets, including the Financial Times, have reported that deteriorating U.S. and South Africa relations could cast doubt on future rounds of funding, particularly debt financing expected from the DFC.

The Phalaborwa project is a unique re-mining operation of carbonatite-hosted phosphogypsum tailings, a by-product of historic phosphate mining in the area.

The gypsum stacks contain enriched levels of neodymium, praseodymium, dysprosium and terbium, allowing for faster timelines and lower environmental impact than conventional REE mines.

Technology is central to the project and Rainbow Rare Earths is working with K-Technologies, based in Florida, USA, to apply cutting-edge solvent-extraction flow sheet separation.

While initial recovery operations occur in South Africa, the complex separation of high‑purity oxides takes place in the U.S.

Enhancing the economic resilience

Rainbow Rare Earths built their own laboratory earlier this year in Johannesburg, South Africa, where the company has been doing laboratory test work and trade-off studies that are being evaluated to further optimise capital and operating costs for the project.

According to George Bennett, CEO of Rainbow Rare Earths, this optimisation work will further enhance the economic resilience of the project.

“At a time when the world urgently needs diversified REE supply, Phalaborwa is poised to be a strategic source of all four magnet rare earths,” says Bennett.

An April 2025 Washington Post report highlights that President Trump’s suspension of aid and investments has raised substantive uncertainty regarding ongoing US support of Phalaborwa.

With increased diplomatic tension between Washington and Pretoria, it will be interesting to watch this space over the next few weeks.

Follow WhyAfrica and stay informed and updated about the latest diplomatic moves and how it affects mining in Africa.

To read more about African mining visit the WhyAfrica website, your one-stop shop for on the ground information and business intelligence about Africa.

Image: First production of mixed rare earth sulphate. Image credit: Rainbow Rare Earths.