Challenge
Rare earth elements (REE) found in the earth’s crust are vital inputs for advanced manufacturing, energy production, and the development of innovative technologies. REE refinement, a key stage in the critical minerals supply chain, is a complex and cost-intensive process. By subsidizing these costs, China has been able to undercut potential competitors and, in some cases, drive them out of business. As a result, China currently controls more than 85 percent of the world’s REE processing.
Solution and Impact
In Malawi, DFC is providing project development support to Lancaster Exploration Limited, a subsidiary of Mkango Resources of Canada, in the development of the Songwe Hills Rare Earths mine, a landmark project that will help advance rare earths supply chains that are decoupled from strategic adversaries.
DFC’s project development funds support final engineering design required to begin construction on the Songwe Hills mine, which will advance the project for potential DFC financing. Separating rare earth elements from mined ore requires multiple steps at the mining site before they can be transported for further processing. Following the initial separation, a high-value mixed rare earth carbonate (MREC) would be sent by rail to Mozambique’s Nacala port and on to Poland for further processing.
Lancaster is working with the Polish company Grupa Azoty Pulawy S.A. to establish a rare earth separation plant in Pulawy, Poland, with construction to begin in 2026. The facility would be only the third rare earth separation plant outside of China and would represent a major breakthrough in diversifying supply chains.
This project was profiled in 2026.