Challenge
Global demand is surging for rare earth elements essential to American national and economic security, and used widely in the automotive, technology, energy, and robotics sectors. But Chinese dominance in the mining and processing of these critical minerals leaves U.S. and allied supply chains vulnerable. China currently controls nearly 60 percent of the world’s rare earth mining operations and more than 85 percent of refining capacity, meaning that many of the rare earths produced around the world must be shipped to China for processing.
Solution and Impact
DFC committed Project Development funding to help Pensana Plc, a rare-earth minerals company, advance development of mineral refining facilities in Angola. The transaction is poised to disrupt China’s dominance of these supply chains and create an independent source of rare earth elements to feed into U.S. and allied markets.
U.K.-based Pensana will use the DFC project development support to conduct testing at Angola's Longonjo neodymium and praseodymium mine, which is believed to be one of the largest developing rare earth deposits in the world. The facility’s viability is strengthened by its proximity to the Lobito Railway – another DFC-backed project – to facilitate transportation of these deposits to the Lobito port on Angola’s Atlantic coast from a part of the continent where transit by roads can take months.
The Longonjo mine contains materials needed for manufacturing permanent magnets that are essential components in myriad modern technologies, from aviation to robots to modern automobiles. Pensana will produce mixed rare earth carbonate, or MREC, a compound composed of several rare earth elements. The on-site separation process creates the MREC – which can be further refined on site – and then shipped to the United States or to other trade partners for processing into magnets.
The Angola Sovereign Wealth Fund has invested significantly in the project and is exploring additional mining sites for lithium and copper.
With DFC’s Project Development funding, Pensana will be positioned to further develop and finance refining facilities associated with the mine. The mine is expected to begin Stage 1 production of 20,000 tonnes per year of MREC in 2027 and is targeting the expanded production in Stage 2 of 40,000 tonnes per year of MREC in 2029. The Longonjo facility is expected to have a 20-year mine life once production commences.
MREC from the mine is anticipated to move to the United States for processing through a strategically significant new agreement with Vacuumschmelze (VAC). This leading manufacturer of rare-earth permanent magnets, headquartered in Germany, announced in November 2025 that it would procure MREC from the Angola mine for use at its eVAC Magnetics factory in South Carolina – entirely bypassing processing facilities in China. The announcement aligns with Pensana’s intention to develop more relationships with American companies.
eVAC has committed to building “mine-to-magnet" supply chains that avoid the Chinese market and meet the growing global demand for rare-earth minerals in a way that bolsters American national and economic security.
Refining rare earth elements involves extensive processing to separate them from the surrounding ore. Although China still largely dominates the refining process, the latest moves from businesses like Pensana and its partners represent a growing desire in the critical minerals sector for more diversified supply chains to meet the booming demand for materials needed to produce modern technologies.
DFC’s support for Pensana will help expedite development of the local refining facilities to produce separated rare earth elements, and support associated future expansion of the mining operations as well. The development of separation facilities is designed to help Angola build the scale needed to develop as a local processing hub, becoming a major contributor to a diversified supply chain.
This project was profiled in 2026.