Northern Cape rare-earths project needs R7bn, could create 3,500 jobs – Mantashe

A NORTHERN Cape rare-earths project could create 3,500 jobs and requires an investment of R7 billion, according to Mineral and Petroleum Resources Minister Gwede Mantashe.

The figures appear in a written parliamentary reply to IFP MP Nompumelelo Mhlongo’s question about the government’s Critical Minerals and Metals Strategy.

The Zandkopsdrift project, in the Kamiesberg municipal area of Namakwa, is being developed by Frontier Rare Earths, a private company headquartered in Luxembourg.

It targets neodymium and praseodymium, which are used to make powerful permanent magnets found in electric vehicle motors and wind turbine generators. Frontier also plans to produce battery-grade manganese sulphate.

Mantashe listed R7 billion as the investment required, without specifying how much of that amount had been secured. He also gave no breakdown of permanent, construction or indirect employment within the 3,500-job estimate.

Mhlongo had asked how many local beneficiation projects had received departmental approval since May 2025, what investment had been committed and how many jobs would be created.

“The department does not approve beneficiation projects,” Mantashe said.

He said the Industrial Development Corporation (IDC), which works with the department, had established a Critical Minerals Initiative Coordination Platform that had identified projects for localisation and value addition, mobilised funding and supported several developments.

Mantashe said his department had backed Zandkopsdrift’s recognition as a strategic project under the European Union’s Critical Raw Materials Act. The European Commission’s decision of June 4, 2025, lists the project as a prospective source of magnet rare earths and battery-grade manganese.

In its February 5 announcement earlier this year, Frontier reported a US$20 million (approximately R332 million) equity investment by the IDC in its South African subsidiary, Frontier Critical Minerals, to finance a definitive feasibility study and related corporate development work.

The company scheduled the study for completion in the first half of 2027 and said a mining right and environmental authorisation were in place.

Frontier said its proven and probable reserves could support a mine life of more than 45 years at planned production rates.

The company has signed technology and purchasing agreements with French rare-earths specialist Carester. The arrangement provides for high-purity neodymium-praseodymium oxide to be produced at Zandkopsdrift, while a mixed heavy rare-earth product would be sent to Carester’s facility in Lacq, France, for further separation under a seven-year purchasing agreement.

The IDC also has an option to buy up to 10% of Zandkopsdrift’s production at prevailing market prices, provided it is directed towards further processing in South Africa, according to Frontier.

Frontier’s February announcement put phase-one capital expenditure at US$628 million (approximately R10.4 billion at current exchange rates), excluding contingency, based on its updated 2025 prefeasibility study. Mantashe’s parliamentary reply does not state when the R7 billion figure was calculated or provide a breakdown of the costs it covers.

The project’s prospects come amid rising demand for the minerals used in permanent magnets. The International Energy Agency says demand for magnet rare earths has doubled since 2015 and is projected to grow by more than 30% by 2030 under current policies.

China accounted for 91% of global refined output of magnet rare earths in 2024, according to the agency.

In its February announcement, Frontier said it was targeting first production at Zandkopsdrift in 2030.