• Harena Rare Earths plans to start building its Madagascar mine in 2027

• Two rare earth projects show strong financial potential over long lifespans

• Environmental and social concerns remain central to the public debate

Harena Rare Earths plans to begin construction of its rare earth mine in Madagascar in 2027. The announcement, made on January 26 by the British company, comes just days after the release of an updated feasibility study for another rare earth project on the island. Despite strong local opposition, Madagascar is gradually moving toward the development of its rare earth deposits.

Harena Rare Earths was formed in 2023 through the merger of Australia’s Harena Resources, which held a 75% interest in the Ampasindava rare earth project in Madagascar, and UK-based Citius Resources. In August 2025, the new entity acquired the remaining 25% stake. According to the pre-feasibility study published on Monday, Harena Rare Earths plans to build a mine capable of producing 71,000 tons of total rare earth oxide (TREO) over a 20-year period. Initial investment is estimated at $142 million, with payback expected within five years.

Under the base case scenario, the Ampasindava project shows an after-tax net present value of $464.3 million and an internal rate of return of 27%. Over its 20-year life, the project could generate $2.6 billion in after-tax cash flows. While further optimization is expected in a forthcoming full feasibility study, the other flagship rare earth project in Madagascar has already reached that stage.

This is the Vara Mada project, formerly known as Toliara, developed by U.S.-based Energy Fuels. In 2023, the company announced the discovery of monazite, a rare earth-bearing mineral, at the site, which was initially known for its mineral sands deposits of ilmenite, zircon, and rutile. According to a feasibility study published in early January 2026, the future Vara Mada mine could produce 24,000 tons of monazite per year over a 38-year lifespan. Sales of rare earth production are expected to account for 27% of the project’s total revenue.

Environmental impact under scrutiny

Rare earths are a group of 17 metals that are critical to the energy transition, with demand continuing to rise. China dominates global supply and has used this position as leverage in its trade disputes with the United States and Europe. As Western countries seek alternatives to Chinese supply, projects announced in Madagascar could position the island as a new African source of rare earths. They could also boost revenues from Madagascar’s mining sector, which accounted for 4.6% of GDP and 49% of exports in 2023.

However, the potential economic benefits of the two projects are offset by concerns over their environmental impact. Rare earth extraction is highly polluting, as the metals occur in very low concentrations and require intensive chemical processing, with the risk of chemical discharges into groundwater. Rare earth-bearing rocks also often contain thorium and uranium, both radioactive materials.

On the Ampasindava peninsula, residents, local officials, and civil society groups have raised concerns about damage left by earlier exploration phases and fear a much larger-scale restart of operations. In a 2023 report by French newspaper Le Monde, they cited farmland disrupted by drilling, unmet social commitments, and questions over a development model largely based on agriculture and marine resources. Mining activity, they argue, could weaken livelihoods and biodiversity over the long term without delivering proportional benefits to nearby communities.

Harena Rare Earths has begun the process of securing a mining license for its rare earth project, while Energy Fuels is still negotiating the fiscal terms of its project with the Malagasy authorities. The coming months are expected to clarify how the government intends to address community concerns in these negotiations.

Emiliano Tossou