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Four decades ago, a rare earth processing plant on France’s Atlantic coast was one of the largest in the world, producing materials essential for color televisions, arc lights, and camera lenses. Today, its owner Solvay is striving to rejuvenate the La Rochelle plant after years of reduced output, aligning with Europe’s efforts to enhance mineral production vital for the green energy transition.

The factory’s 76-year history highlights the challenges faced by Europe and the United States as they attempt to reverse the significant shift of rare earth processing to China that began around 25 years ago. China emerged as a dominant force in rare earths, a group of 17 minerals, by offering lower prices than the West, bolstered by government support and often disregarding environmental concerns that accompany the sector’s toxic waste production. Recently, China has intensified sustainability efforts and closed polluting operations.

In the 1980s and 1990s, the La Rochelle plant’s output set the global benchmark for rare earth prices. Today, it produces 4,000 metric tons annually of separated rare earth oxides, a small portion compared to China’s 298,000 tons last year. Solvay’s current focus is on processed rare earths for auto catalysts and electronics, not the permanent magnets essential for electric vehicles (EVs) and wind energy. However, Solvay plans to start producing these by next year.

“We at Solvay want to put rare earths for permanent magnets back on the map in Europe,” said An Nuyttens, president of Solvay’s division that produces rare earth products. “It’s not an easy one; it’s going to be step by step, as the chain from mining up to magnets production needs to be built.”

The 160-year-old chemicals group aims to eventually supply 20% to 30% of Europe’s separated rare earths demand for magnet production, but Nuyttens noted this target might not be achievable until after 2030, with no specific date given.

Under a new EU law effective since May, the bloc has set ambitious 2030 targets for domestic production of critical minerals necessary for the green transition: 10% of annual needs mined, 25% recycled, and 40% processed domestically by the decade’s end. Rare earths, crucial for permanent magnets that power motors in EVs and wind energy, are among the most important critical minerals. EU demand is predicted to increase sixfold by 2030 and sevenfold by 2050.

However, according to production forecasts and interviews with over a dozen industry executives, consultants, EU-funded officials, industry groups, and investors, the EU will struggle to meet most of its rare earth goals. Missing targets in the Critical Raw Material Act (CRMA) could hinder the bloc’s zero-carbon ambitions and increase dependence on China amid heightened geopolitical tensions with the West. China currently accounts for 98% of EU rare earth permanent magnet imports.

EU Commission spokesperson Johanna Bernsel stated that while they couldn’t confirm the Reuters findings, the bloc would do its best to support projects that help meet CRMA goals. “Projects in Europe will benefit from a streamlined permitting process, as well as coordinated support for accessing de-risking financing tools and matchmaking with downstream users,” Bernsel said.

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