Photo Credit: Reuters
LONDON, June 27 (Reuters) – Forty years ago, a rare earth processing facility on the Atlantic coast of France stood as one of the world’s largest, producing materials crucial for color televisions, arc lights, and camera lenses.
Today, Solvay (SOLB.BR), the current owner, is in a race to restore the La Rochelle plant to its former prominence. Over recent years, the plant has seen reduced output amidst Europe’s efforts to ramp up production of minerals vital for the green energy transition.
The factory’s 76-year history encapsulates the challenges facing Europe and the United States as they strive to reverse the significant shift of rare earth processing to China around 25 years ago. China’s dominance in rare earth production—driven by lower costs and government support, albeit at the expense of environmental concerns—led to a massive migration of the industry.
While China has since improved sustainability practices and shuttered polluting operations, the La Rochelle plant, once a global benchmark for rare earth prices in the 1980s and 1990s, now produces just 4,000 metric tons annually of separated rare earth oxides—only a fraction of China’s 298,000 tons output last year.
Furthermore, Solvay’s current focus is on processed rare earths used in auto catalysts and electronics, not the types needed for permanent magnets crucial in electric vehicles (EVs) and wind energy. Solvay plans to begin production of these magnets next year.
“We aim to re-establish Europe’s position in rare earths for permanent magnets,” said An Nuyttens, president of Solvay’s rare earth products division. “It’s a challenging journey that will proceed step by step, as we build the entire supply chain from mining to magnet production.”
Solvay, a 160-year-old chemicals group, ultimately aims to satisfy 20% to 30% of Europe’s demand for separated rare earths used in magnet production, though Nuyttens indicated this goal might not be achievable until after 2030, without specifying a date.
Under a new EU law effective since May, the bloc has set ambitious 2030 targets for critical mineral production essential for its green transition—aiming for 10% mined domestically, 25% recycled, and 40% processed within the EU. Rare earths have been singled out as crucial due to their role in EV and wind energy applications, with EU demand projected to skyrocket sixfold by 2030 and sevenfold by 2050.
However, meeting these targets for rare earths will prove challenging, according to production forecasts and interviews with industry insiders, consultants, EU officials, and investors. Missing these goals under the Critical Raw Material Act (CRMA) could hinder the EU’s carbon neutrality objectives and increase reliance on China amid heightened geopolitical tensions.
Responding to these concerns, EU Commission spokesperson Johanna Bernsel stated that while unable to confirm Reuters’ findings, the bloc remains committed to supporting projects that facilitate CRMA goals. “European projects will benefit from simplified permitting processes, coordinated access to risk-reducing finance tools, and matchmaking with downstream users,” Bernsel added.
