Europe’s Drive for Rare Earth Supply Independence from China

For nearly eight decades, Solvay’s rare earth metals processing facility on France’s Atlantic coast has served as a critical hub for extracting these vital elements. Now, amid a global scramble to secure supplies for emerging technologies, the Belgian chemical giant is investing heavily to expand the plant a move seen as pivotal to Europe’s ambitions to reduce its heavy reliance on Chinese rare earths.

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Europe’s Growing Urgency to Secure Rare Earths

Rare earth elements, a group of 17 chemically similar metals, are indispensable components in a myriad of modern technologies, including smartphones, electric vehicles (EVs), wind turbines, MRI machines, and defense systems. Despite their name, these metals are relatively abundant but difficult and expensive to mine and process.

Currently, China dominates the global rare earths sector, controlling approximately 70% of mining and a staggering 90% of refining capacity. This near-monopoly stems from decades of state-backed development strategies and willingness to tolerate significant environmental impacts associated with extraction and processing.

Europe, alongside other regions such as North America and Australia, has grown increasingly concerned about this dependency, particularly given recent geopolitical tensions, the Covid-19 pandemic disruptions, and trade uncertainties arising from the conflict in Ukraine. These factors have underscored the vulnerabilities in global supply chains that rely heavily on a single source.

Philippe Kehren, Solvay’s CEO, emphasized the risk of concentration: “When you have a material that is coming almost 100% from one specific location, if you are dependent on this, you want to diversify your sourcing. This is what we can offer,” he explained during a tour of the La Rochelle facility.

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The Critical Raw Materials Act: A Strategic Framework

In response to these strategic vulnerabilities, the European Union introduced the Critical Raw Materials Act in 2024, setting ambitious targets to reduce import dependency in extraction, processing, and recycling of essential materials by 2030.

Europe currently operates only two rare earths processing facilities: one in Estonia and Solvay’s plant in La Rochelle. Notably, the French site is the sole European plant capable of processing all 17 rare earth elements, positioning it as a linchpin in the bloc’s push for supply chain resilience.

The La Rochelle plant’s expansion aligns with its shift away from producing rare earth compounds primarily for catalytic converters towards processing materials needed for high-performance magnets. These magnets are critical for EV batteries, advanced electronics, and defense technology sectors experiencing exponential growth amid the green energy transition and rising geopolitical tensions.

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Recycling, New Mining Ventures, and Diversifying Supply Chains

Initially, Solvay is concentrating on recycling rare earths from end-of-life motors and electronic equipment already present in Europe. “We think that we can probably produce 30% of the rare earths needed by Europe just by recycling,” Kehren stated. However, as demand escalates, virgin ores will become indispensable.

Currently, Europe has no operational rare earth mines. Advanced projects in Norway and Sweden represent some of the most promising developments but are unlikely to be production-ready before the late 2030s. Kehren stressed the importance of regional sourcing diversity: “I think it’s absolutely necessary to have our own mines, not necessarily a lot of them, because we can have a mix, but it’s important to have our own sourcing.”

Outside European borders, efforts to secure raw material supplies have accelerated, exemplified by recent EU trade agreements with South American countries such as Argentina, Brazil, Paraguay, and Uruguay. Australia’s Viridis Mining is developing a large rare earth mine in Brazil that hopes to supply up to 5% of the world’s rare earths. CEO Rafael Moreno highlighted the critical role of government support: “Regulatory and financial backing is the key right now,” he told Reuters.

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The Complex and Secretive Nature of Rare Earth Processing

Rare earth separation is an intricate process involving approximately 1,500 discrete chemical steps from ore to final product. The La Rochelle facility spans 40 hectares and employs over 300 personnel. It features extensive industrial plantings with interconnected pipelines, cylindrical chemical storage tanks, and enormous vats where rare earth elements are painstakingly separated through liquid-liquid extraction.

Florian Gouneau, production manager at the facility, described the separation process as akin to sorting different fruit juices from a blended drink. “The objective of the liquid separation unit is to purify cerium on one side, lanthanum on the other,” he explained during a rare guided tour of one the plant’s closely guarded separation rooms. The proprietary technology, built up since the plant’s inception in 1948, is closely protected to prevent the diffusion of industrial know-how, which remains predominantly concentrated in China.

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Government Support and Geopolitical Dimensions

The French government is actively supporting Solvay’s expansion, providing approximately €20 million ($23 million) in tax credits. Benjamin Gallezot, President Emmanuel Macron’s adviser on strategic minerals, underlined the geopolitical risks of dependence on a single supplier. “Having a dependency on a single source it is dangerous because you cannot know what will happen to this source for various reasons,” he said.

While declining to comment directly on China’s current export restrictions, Gallezot emphasized the importance of economic cooperation: “I think economic cooperation is clearly more powerful than just only pure competition.”

Meanwhile, the European Parliament has called for firmer action to reduce reliance on Chinese rare earths, denouncing Beijing’s export controls as “unjustified” and “intended to be coercive.” Chinese Foreign Minister Wang Yi defended China’s position on recent visits to Germany, calling such controls a “sovereign right” and “common practice,” particularly for materials with dual-use commercial and military applications.

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Environmental and Economic Challenges Ahead

China’s dominance in rare earth metals partly reflects its willingness to tolerate the considerable environmental and radioactive pollution generated by mining and processing operations. Solvay CEO Kehren asserted that responsible, lower-impact processing methods are feasible but entail higher costs: “There are solutions to do it in a very responsible way without polluting. It costs a bit of money, so you need to be ready to pay a little bit more.”

Pricing and long-term supply commitments remain critical for the viability of expanded European production. Kehren called on downstream customers suppliers to automakers and technology firms to secure purchase agreements that provide certainty in volume and pricing. “Are there going to be financial incentives, for example, for the different players in this value chain to source rare earth elements from Europe?” he queried, highlighting the need for comprehensive policy frameworks to support the emerging supply chain.

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Outlook: A Strategic Frontier for Europe’s Green and Digital Future

As Europe pushes to meet its carbon-neutral commitments and strengthen digital infrastructure, the role of rare earth metals will become ever more critical. Solvay’s investment underlines a growing recognition that securing resilient, diversified, and environmentally responsible supplies of these elements is not simply an industrial challenge but a strategic imperative.

By expanding the La Rochelle facility and fostering recycling and new mining projects, Europe is cautiously stepping onto a path that may gradually chip away at China’s near-total control over the rare earth sector.

Yet significant hurdles remain. Developing new mines, scaling processing capacity, managing environmental impacts, and coordinating policies across diverse stakeholders will require sustained political will and industry collaboration in the years ahead.

As Kehren noted, “The EU has written its targets into law, but the question is how they make them happen.” The answers will shape the continent’s technological and economic landscape for decades to come.

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