Rise of African rare earths bolsters supply pipeline for China and the West

Africa is set to become a major new rare earths ore exporter to Chinese and Western processors, with eight pipeline projects due to go into production across the continent by 2029.

Rare earth’s biggest end use are rare earth permanent magnets (REPMs) for wind turbines and EV motors, a supply chain that China dominates.

Tanzania will become one of China’s fastest-growing sources of imported rare earth ores this decade, despite producing none today.

By 2029, the east African country is expected to send all its rare earths output to Chinese processors, amounting to 10% of China’s imported mined rare earths supply in 2029, according toBenchmarks Rare Earths Forecast.

Tanzania’s rise as a producer will mirror broader growth in African rare earths mining. The continent will go from producing no PrNd today to contributing about 9% of global mined supply in 2029.

“African projects have very low CAPEX and OPEX requirements compared to other ex-China projects. Also, government support is there, hence licensing and permits are easier,” said Benchmark senior analyst Neha Mukherjee.

China will not be the only beneficiary of Africa’s active, low cost pipeline, which will also become strategically valuable for the EU and US.

African rare earths should become critical to Western rare earths supply chains facing cost challenges in building ex-China mined capacity.“The main reasons ex-China struggles to compete with Chinese producers are high operational costs and capital returns, especially in thelow price environmentswe are seeing today,” said Mukherjee.

Why does China need rare earth imports?

China may be the world’s biggest rare earths miner but the sheer size of its processing industry means it also requires imports.

Myanmar and Thailand will provide 86% of its imported rare earths in 2024 but China will rapidly diversify over the coming years, something Tanzanian supply will support.

Which African countries have a rare earth mine pipeline?

Tanzania is only one of five African countries that have rare earths projects due to come online by 2029. The others are Angola, South Africa, Malawi, and Uganda.

Malawi may become Africa’s top rare earths miner by 2029, with Benchmark forecasts indicating 30% of the continent’s supply will come from the country’s two pipeline mines, Songwe Hill and Kagankunde by that year.

Still, Tanzania could end up taking the top spot once output forecasts for its Wigu Hill project become clearer.

Angola is expected to contribute 23% to total African PrNd supply in 2029 while South Africa is expected to supply 18%. Uganda is due to contribute 3%.

Is Africa a China alternative for Western processors?

All of Tanzania’s rare earth ores are tied up in supply agreements with firms in China but this remains exceptional on the wider continent, with just 37% of total African rare earths ores set to go to Chinese companies in 2029, according to Benchmark analysis.

This leaves most African rare earth ores potentially available for ex-China and Western rare earths companies.

“Ex-China pipeline processors are going to absorb the rest of the materials. The highest number of processors being developed outside of China is in Europe,” said Mukherjee.

All eight projects current in the pipeline in Africa are being developed by companies registered in Western countries.

Yet for some of these miners, Western processing capacity is not expanding quickly enough and continue to rely on Chinese customers for offtakes that will secure project viability.

Benchmark’s Rare Earths Forecast examines supply, demand, prices and costs for rare earth elements out to 2040 updated on a quarterly basis.

It forms part of our wider rare earths market intelligence alongside our Rare Earths Price Assessment and ESG Report.

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