Musk wants South African rocket launch site and rare earths

Daily Maverick

2 days ago

New developments since the Oval Office spectacle cast new light on the potential implications for South Africa's critical minerals, space ambitions, and ongoing trade negotiations.
Three weeks ago, behind closed doors at the White House, South African-born billionaire Elon Musk and US President Donald Trump found common ground in a much friendlier, extended lunch meeting with President Cyril Ramaphosa, which followed an earlier public spat in the Oval Office.
While that initial encounter set the stage, a flurry of developments since – including a public and very messy fallout between Trump and Musk – has cast new light on the potential implications for South Africa's critical minerals, space ambitions, and ongoing trade negotiations.
As previously reported for Business Day, both Musk and Trump talked to the South Africans about South Africa's rare earths and extremely high tariffs on imported cars. Rare earths are used in magnets in just about every hi-tech gadget on Earth, and especially in electric vehicles (EVs).
'You guys are the largest economy on the continent… and you have minerals we need,' Trump said, according to DA leader and Agriculture Minister John Steenhuisen, who was in the room.
Both Musk and US Commerce Secretary Howard Lutnick were interested in South Africa's critical minerals because of the shortage of rare earths used, especially in magnets. Magnets are vital in several of Musk's multibillion-dollar businesses, and he takes an active interest in the location of mines capable of providing the rare earths they require.
Though Trump did most of the talking and Musk was almost as reticent in the closed-door lunch meeting as in the Oval Office, both had rare earths and their use in magnets on their minds. At the time, China, the world's main supplier of rare earths for magnets, had frozen exports of both the minerals and the magnets to the US.
There have been a few key developments since the White House meeting. This week, China and the US agreed that China's magnet and rare earths exports to the US will resume. The magnet and rare earths freeze was a significant threat to the US, and several product lines had to suspend production in the US, Japan and Europe.
You could say Musk got to experience what it felt like to be Ramaphosa or Ukraine President Volodymyr Zelensky.
South Africa has a valuable rare earths mine, Steenkampskraal, about 380km north of Cape Town, but its first significant output will not be available until some time next year (2025).
Musk also said he was interested in launching SpaceX rockets from the Denel Overberg rocket test site at Arniston, outside Cape Town. Two space experts said the value of the Arniston launch site to Musk is to launch satellites that will orbit over the South Pole, as well as Starlink low-Earth orbit satellites to provide broadband to consumers.
In the White House meeting, Musk did not mention Starlink, which has been in the news in South Africa lately, apparently because the South African government has already set up a process to review its Broad-Based Black Economic Empowerment (B-BBEE) policy as it affects companies like Starlink.
This week, Communications Minister Solly Malatsi confirmed that the decision will depend on a review process by the Independent Communications Authority of South Africa, which he first raised in September 2024. The review was announced last month, but no outcome of that process is expected soon.
In the three weeks since the White House meeting, Trump and Musk have exchanged extremely harsh words in a fallout that echoed around the world. You could say Musk got to experience what it felt like to be Ramaphosa or Ukraine President Volodymyr Zelensky, though Musk, at least, brought it on himself.
Musk broke with Trump by announcing that he 'couldn't stand it anymore', called Trump's omnibus budget bill, the One Big Beautiful Bill – its official title – a 'disgusting abomination', an 'outrageous, pork-filled' spending bill that will 'massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America [sic] citizens with crushingly unsustainable debt'.
Then Musk alleged that Trump is implicated in the scandal around indicted alleged paedophile Jeffrey Epstein, who committed suicide in prison before his trial. Oops.
More directly relevant since the White House meeting is the still uncertain status of US-South Africa trade talks.
Then on Tuesday Musk dialled it back with a reconciliatory phone call. Clearly he discovered being out in the cold was no fun. 'I regret some of my posts about President @realDonaldTrump last week,' he messaged. 'They went too far.' Then the two men spoke on the phone. We'll see where that goes.
Musk apologised, but didn't say which part was 'too far' – the bill or the hint at a connection to an accused paedophilia celebrity? Musk's objection to the bill is real. Musk believed most fervently in that part of the Maga agenda that would cut America's mushrooming debt. With this bill, that goal has been abandoned and may be hard to resurrect.
But what does the Trump-Musk feud mean for South Africa's trade negotiations, particularly in light of these recent developments?
More directly relevant since the White House meeting is the still uncertain status of US-South Africa trade talks. Ramaphosa has announced that he will meet Trump this weekend in Canada on the sidelines of the G7 meeting.
However, Trump is running the policy for South Africa directly from the White House, and sources in the State Department said nothing from the White House meeting has trickled down to them to indicate that negotiations are under way. Trump has successfully imposed a total blackout on any leaks about what happened behind closed doors.
Neither Secretary of State Marco Rubio nor anyone from his department was in the meeting. The three officials who did discuss a new trade deal with the South African delegation are located elsewhere in the administration, and Trump has not yet nominated an Assistant Secretary of State for African Affairs, who normally leads US Africa policy.
Jamieson Greer, the US Trade Representative, which is a cabinet position, met the South African ministers in Washington for substantive talks. And at the White House, Lutnick was active in discussing future deals.
Trump, who has taken a special interest in the auto sector, raised the question of auto tariffs and directed Lutnick to follow up in his talks with South African Trade and Industry Minister Parks Tau.
Perhaps the most important implementer of US Africa policy at present, Massad Boulos, who is a senior adviser to the US president, was in the meeting too.
The father-in-law of Tiffany Trump, the president's youngest daughter, Boulos emigrated to Texas from Lebanon as a teenager, and spent his career in Nigeria as CEO of a trucking and heavy machinery dealership. He was instrumental in the Trump campaign for Arab-American votes in the election in 2024. His first appointment was as Arab and Middle Eastern adviser to the president, a position he still holds.
Boulos, whom Trump singled out in the Oval Office meeting, has been driving US policy in eastern DRC peace talks, and had meetings with the Nigerian president, among others, since taking office.
The Denel Overberg test site near Arniston, the brainchild of the Aerospace Systems Research Institute led by Professor Michael Brooks at the University of KwaZulu-Natal, has successfully launched several suborbital South African rockets to nearly 18km, some using South African-made engines. Its last launches used a new six-storey gantry, and it is currently on track to be capable of launching satellites into orbit in 2028. A SpaceX investment could significantly accelerate this progress.
More than 30 significant space companies and start-ups are based in South Africa. They collaborate with the South African National Space Agency.
Sources in Washington are reluctant to predict whether the optimism of Ramaphosa and his delegation about a trade deal will be justified.
South Africa is currently working with international space sector partners in the US, Europe and China. The US and South Africa are partnered on a project to build a new deep-space ground station in Matjiesfontein in the Western Cape. It will support communications for future US Artemis missions to the moon and Mars.
In August 2023, Chinese President Xi Jinping signed two agreements with South Africa on cooperation in space projects. One focused on crewed spaceflight, and the other included South Africa in the team for the planned Chinese-Russian International Lunar Research Station.
South Africa is also working with the European Space Agency.
The trade deal South Africa offered the US included a duty-free quota of 40,000 US vehicles a year for the auto sector and duty-free access for automotive components sourced from South Africa for automotive production in the US.
South Africa agreed to buy LNG gas from the US for 10 years, costing about $1.2-billion in trade per annum, or $9-billion to $12-billion over 10 years.
Sources in Washington are reluctant to predict whether the optimism of Ramaphosa and his delegation about a trade deal will be justified. Trump was aiming for 90 trade deals with foreign countries in 90 days. That was 70 days ago, and only one outline deal, with the UK, has been announced.
More than any president in recent history, the final decision will depend almost entirely on how this president feels about it at the time. DM