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Chemicals group Solvay said it was increasing production of rare earth materials at its plant in western France, as soaring global trade tensions underscored the need for Europe to reduce its reliance on imports of materials that are vital for the energy transition.
The new production line at its La Rochelle plant will produce materials for advanced magnet technology that is used in a range of industries including electric vehicles, wind turbines and defence systems.
The move to expand the plant comes as US President Donald Trump’s trade wars have highlighted the urgency for Europe to wean itself off supply chains that are dominated by China, which last week retaliated against sweeping tariffs by announcing new export bans on certain rare earths.
China controls about 90 per cent of global rare earths processing capacity, according to the International Energy Agency, leaving Europe vulnerable to supply shocks just as the energy transition is set to boost demand for the key materials.
Belgium-based Solvay aims to produce 30 per cent of European demand for rare earths used in so-called permanent magnets by 2030. They generate their own magnetic field and maintain their magnetism for a long time.
“Customers are very interested, they know what’s at stake,” said An Nuyttens, president of Solvay’s special chem business. “They need this independence from China.”
Rare earths comprise a group of 17 elements and are not especially rare, with China having a little under half of the world’s reserves. The problem is less about finding raw materials but the difficulty and cost of extracting and turning them into the materials needed for magnet production.
China’s export ban on Friday was “the blow that international rare earths consumers have long been dreading” and could cause prices to soar, said Ellie Saklatvala from price reporting group Argus Media.
Scaling up production at La Rochelle to reach the 30 per cent goal could require an investment of €100mn or more, and for customers to enter into contracts for the materials, said Philippe Kehren, Solvay’s chief executive.
At this early stage, Solvay has not yet secured agreements with buyers for its oxides, the chemical compounds made from rare earths that are used in the production of permanent magnets.
In addition to dominating the global supply chain for rare earths, China also typically produces the metals and their oxides more cheaply.
“The good intentions are there [among European governments and businesses] but we need to act faster,” said Kehren, pointing at US support for its critical minerals and metals sector. He said while Solvay’s pricing would not be as competitive as that of Chinese peers, the difference was not “big”.
The group said it would source the rare earths that it turns into oxides from miners and magnet recyclers, including the Canadian metals recycling group Cyclic Materials.
Solvay does not plan to source material for the new production line from China, meaning “we really need to get junior minors up to speed”, Nuyttens said.
