Highlights

• Belgian chemical company Solvay plans to expand rare earth processing at its La Rochelle plant to reduce Europe's reliance on Chinese imports.
• The expansion focuses on neodymium and praseodymium processing, crucial for electric vehicle and wind turbine magnets.
• Solvay aims to supply 30% of Europe's rare earth demand by 2030.
• There are challenges in competing with Chinese production costs.

Belgian chemical company Solvay has announced (opens in a new tab) an expansion of its rare earth processing operations at its 77-year-old plant in La Rochelle, France. This initiative aims to reduce Europe's reliance on Chinese rare earth supplies, especially following China's recent implementation of export controls on certain rare earth elements. ​

The La Rochelle facility, once a global leader in rare earth processing, had seen diminished output due to China's dominance in the sector, accounting for approximately 90% of global production. Solvay's expansion focuses on processing neodymium and praseodymium, essential elements for manufacturing powerful magnets used in electric vehicles and wind turbines. The company aims to supply 30% of Europe's demand for these materials by 2030.

Solvay has made an initial modest investment and is currently operating at a low level of output. The company is seeking commitments from customers, such as automakers and wind turbine manufacturers, before proceeding with a full-scale €100 million expansion. CEO Philippe Kehren emphasized the need for support from the entire value chain and the European Union, which has set ambitious processing targets under the Critical Raw Materials Act.

While Solvay's efforts represent a significant step towards diversifying Europe's rare earth supply chain, challenges remain. Europe is projected to produce less than 5,000 metric tons of rare earth oxides annually by 2030, compared to an estimated demand of 30,000 tons. The cost gap between European and Chinese production, ranging from 20% to 40%, poses additional hurdles for European competitiveness in this sector.

Solvay's expansion aligns with broader efforts to establish a more resilient and diversified rare earth supply chain in Europe. Other companies, such as Neo Performance Materials (opens in a new tab) (Canada) and REEtec (opens in a new tab) (Norway), are also developing processing and magnet production facilities within the continent. These initiatives aim to reduce dependency on Chinese imports and support the growing demand for rare earth elements in green technologies.