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South Africa\u2019s development finance institution has invested $20 million in a domestic rare earths project, which aims to help the European Union reduce its dependence on China for critical minerals.<\/p>\n
Read: Rare earth minerals and the AI boom<\/p>\n
The state-owned Industrial Development Corp is backing Frontier Rare Earths\u2019s Zandkopsdrift project in the Northern Cape province, the Luxembourg-registered company said in a statement on Thursday. The EU, which is working to strengthen its critical minerals supply chains, designated the asset as a strategic project last year.<\/p>\n
Read: Just critical minerals<\/p>\n
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The IDC\u2019s equity investment is funding a definitive feasibility study for Zandkopsdrift, which aims to produce rare earth products and battery grade manganese from 2030, Frontier said. The statement didn\u2019t disclose the size of IDC\u2019s shareholding.<\/p>\n
China currently dominates the processing and refining of rare earth elements which are found in permanent magnets used in everything from smartphones, drones, electric vehicle motors and wind turbines. The US, EU and others are trying to develop alternative sources of supply.<\/p>\n
Frontier said that \u201cmultiple potential EU funding pathways\u201d are \u201cunder evaluation\u201d for Zandkopsdrift. The company also said it has signed an agreement with Carester SAS, which will deploy proprietary extraction technology at the mine and process some of the future offtake at a separation plant being built in France.<\/p>\n
Read: Emerging markets: Opportunity beneath the surface<\/p>\n
Revenue generated by the manganese byproduct means Zandkopsdrift is \u201cexpected to be the lowest cost producer of rare earths outside China,\u201d Frontier Chairman Philip Kenny said in the statement.<\/p>\n
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The investment in Frontier\u2019s local subsidiary \u201creflects our mandate to support projects that advance Southern Africa\u2019s industrialisation and critical minerals strategy,\u201d Rian Coetzee, IDC\u2019s executive for industrial planning and project development, said in the statement.<\/p>\n
Read: G20 call to shield critical minerals, a veiled swipe on China?<\/p>\n
The IDC has other investments in the mining and metals sector in companies including Kumba Iron Ore, ArcelorMittal South Africa and Merafe Resources.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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