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Miami Herald
08-07-2025
- Business
- Miami Herald
The French seaside factory trying to break China's chokehold on rare earths
LA ROCHELLE, France -- In a squat warehouse not far from the Atlantic shoreline in La Rochelle, France, sits a cluster of giant metal tanks topped by gently whirring motors. They are a gamble on the future of European industry. Since April, the tanks have been purifying two rare earth minerals: a hot pink solution called neodymium and lime-green praseodymium. Both are turned into powder and then sold for use in permanent magnets -- crucial materials in producing modern cars, wind turbines and military equipment. For now, the quantities being produced are experimental and tiny. Solvay, the Belgium-based company that owns the plant, will increase production only if it can find customers. 'We are just here signaling that we are available to Europe,' said Philippe Kehren, Solvay's CEO. The company is an example of an unfolding trend. Europe is trying to get back into the rare earths business, but the barriers are towering, and whether it will succeed is uncertain. Rare earth minerals are critical components to advanced technologies in industries including energy and transportation. Magnets made with rare earths are particularly powerful and resistant to heat, making them useful in small electric motors and other applications. Most of these 17 important elements -- difficult and often dirty to mine and refine at scale -- come from China, which has spent decades becoming the dominant producer. Europe once had a substantial rare earth industry. The plant in La Rochelle, in operation since 1948, has long focused on the minerals. But in the 1980s and '90s, Europe outsourced much of the pollution-heavy production to China. Now, European policymakers have become painfully aware that China has the continent in a chokehold. In recent weeks, China has curbed global access to rare earths and to the permanent magnets they go into, part of its response to American tariffs and other global trade tensions. The limits have left European producers scrambling. While Europe was already working to shore up its supply of critical raw materials, some experts think the disruption could be the kick the continent needs to start diversifying in earnest. Doing so is no easy task. China has the technical knowledge, workforce and scale to mine rare earths efficiently, and it has laxer environmental regulations. The combination makes it difficult if not impossible for European companies to rival Asian producers on cost. 'Europe understood that mining is a dirty business, so they outsourced it elsewhere,' said Alena Kudzko, a policy director at Globsec, a European research group. 'And it became this snowball effect,' she added. 'We made a choice decades ago, and now it would be very hard to reverse.' Europe is even more dependent on China for the minerals than the United States is. About 98% of the bloc's rare earth imports come from China, versus 80% for America. 'We are lagging behind -- we are lagging behind China, we're lagging behind the United States -- in reviving our mining sector,' said Hildegard Bentele, a member of the European Parliament from Germany. Policymakers have worried for years that China might weaponize its rare earth dominance. In 2010, China halted shipments to Japan for two months amid a diplomatic standoff, and in 2012, it placed broad export controls on rare earths. Given that, China's trading partners have been working to reduce their dependencies. In 2023, the European Union passed a law meant to help secure its future supply of critical raw materials. The bloc has announced dozens of projects as part of the plan, with an eye on mining and refining cobalt, copper, lithium and rare earths. But Bentele, who helped to shepherd the raw materials act into law, said that while the recent response was fast by European standards, 'of course, that's not enough.' Part of the problem, she pointed out, is that for European production to work, companies would need to decide that having a reliable, nearby supplier was more important than minimizing costs. 'If you, as a company, go with the risky partner, then you run the risk,' she noted. It's not clear that businesses will make the higher-cost choice. That's why Solvay has invested only a few million dollars to churn out rare earths in small amounts. If there is enough demand from car manufacturers and others, the company could supply up to 30% of Europe's needs. But that would require sinking 100 million euros, about $117 million, into scaling up production. 'If we don't have many buyers, we're not going to invest,' Kehren said. The current disruption could be a boon for the company if it speeds up Europe's diversification. Some industry experts think that China's latest rare earth restrictions could be the spur for European businesses to speed up diversification. Since early April, China has required foreign customers to have export licenses to buy rare earth minerals. But officials have been slow to process the licenses, which has created the potential for widespread shortages. The European Association of Automotive Suppliers said that only about half of export license requests had been approved as of late June, an improvement from earlier in the month but still enough to disrupt industry and leave executives scrambling. On the license applications, Chinese trade officials have also asked for details that many European companies see as sensitive business information, said Luisa Santos, deputy director general at the lobby group BusinessEurope. And though China's Ministry of Commerce said in May that a channel had been established to expedite rare earth licenses for EU companies, delays have persisted. 'We're all very conscious of the problem,' Santos said of the rare earth dependency. 'We have had a system that was based on efficiency, cost cutting, but now that's changing.' The European Union has been approving projects to try to jump-start rare earth supply in the bloc, and government support could help companies to at least start production. Solvay has already locked down support from France and is in talks with the wider bloc to find funding for any potential expansion. Ursula von der Leyen, president of the European Commission, recently took a permanent magnet made at a new factory in Estonia to show to her colleagues at the Group of 7 meeting in Canada. 'China is using this quasi monopoly not only as a bargaining chip, but also weaponizing it to undermine competitors in key industries,' she said. 'Even if there are signals that China may loosen its restrictions, the threat remains.' Europe is not looking to build a wholly homegrown industry. While the bloc is exploring mining and refining capacity within its own borders, it is also looking to secure supply from countries other than China. The point is to diversify. Nor are European policymakers and firms bent on getting their rare earths from the ground. The bloc is also trying to recycle rare earths, which would pollute less. Under the critical raw materials act, the goal is to have 10% of Europe's raw material needs mined, 25% recycled and 40% processed in Europe by 2030. Because rebuilding a supply chain will take time, the problem in the near term is diplomatic. European officials are pushing China to improve access to rare earths, and the topic is expected to come up at a summit between Brussels and Beijing in late July. For companies like Solvay, the question is whether today's problems will remain in focus if the supply complications ease in the coming months and the need to source locally fades. 'At the CEO level, yes, it's strategic, but then, when the procurement teams come in, it's still about price,' said Nils Poel, head of market affairs at the European Association of Automotive Suppliers. But, he noted, that could be starting to change. 'There's a little more willingness, now, to pay a premium.' This article originally appeared in The New York Times. Copyright 2025
New York Times
08-07-2025
- Business
- New York Times
Europe Needs Rare Earth Metals. Can a Factory in Seaside France Supply Them?
In a squat warehouse not far from the Atlantic shoreline in La Rochelle, France, sits a cluster of giant metal tanks topped by gently whirring motors. They are a gamble on the future of European industry. Since April, the tanks have been purifying two rare earth minerals: a hot pink solution called neodymium and lime-green praseodymium. Both are turned into powder and then sold for use in permanent magnets — crucial materials in producing modern cars, wind turbines and military equipment. For now, the quantities being produced are experimental and tiny. Solvay, the Belgium-based company that owns the plant, will increase production only if it can find customers. 'We are just here signaling that we are available to Europe,' said Philippe Kehren, Solvay's chief executive officer. The company is an example of an unfolding trend. Europe is trying to get back into the rare earths business, but the barriers are towering, and whether it will succeed is uncertain. Rare earth minerals are critical components to advanced technologies in industries including energy and transportation. Most of these 17 important elements — difficult and often dirty to mine and refine at scale — come from China, which has spent decades becoming the dominant producer. Want all of The Times? Subscribe.
Business Upturn
08-05-2025
- Business
- Business Upturn
Solvay first quarter 2025 results
By GlobeNewswire Published on May 8, 2025, 10:00 IST Press release Regulated information Resilient performance supported by a diversified portfolio and cost savings Brussels, May 8, 2025, 7.00am CEST Highlights Underlying net sales in Q1 2025 of €1,122 million were down -5.8% organically compared to Q1 2024. Uncertainties on the macro-environment led customers to be more cautious in the second part of the quarter, creating some softness in Soda Ash, particularly in March. Most of the other businesses showed resilient performance. in Q1 2025 of €1,122 million were down -5.8% organically compared to Q1 2024. Uncertainties on the macro-environment led customers to be more cautious in the second part of the quarter, creating some softness in Soda Ash, particularly in March. Most of the other businesses showed resilient performance. Underlying EBITDA in Q1 2025 decreased year-on-year to €250 million (-5.7% organically) compared to Q1 2024, with 22.3% underlying EBITDA margin. It was supported by a one-off gain of c. €10 million on the favorable outcome of a patent dispute in Performance Chemicals. in Q1 2025 decreased year-on-year to €250 million (-5.7% organically) compared to Q1 2024, with 22.3% underlying EBITDA margin. It was supported by a one-off gain of c. €10 million on the favorable outcome of a patent dispute in Performance Chemicals. Structural cost savings initiatives delivered €27 million in Q1 2025, bringing the cumulative savings to €137 million since the start of 2024. initiatives delivered €27 million in Q1 2025, bringing the cumulative savings to €137 million since the start of 2024. Underlying net profit from continuing operations was €102 million in Q1 2025 vs. €119 million in Q1 2024. from continuing operations was €102 million in Q1 2025 vs. €119 million in Q1 2024. Free Cash Flow amounted to €42 million in Q1 2025, in line with normal seasonality, including Capex of €-70 million. amounted to €42 million in Q1 2025, in line with normal seasonality, including of €-70 million. Underlying Net Debt at €1.7 billion, implying a leverage ratio of 1.7x. at €1.7 billion, implying a leverage ratio of 1.7x. 2025 outlook confirmed: underlying EBITDA currently expected to reach the lower half of the guidance range; free cash flow1 guidance of €300 million confirmed Underlying (in € million) Q1 2025 Q1 2024 % yoy % organic Net sales 1,122 1,201 -6.6% -5.8% EBITDA 250 265 -5.9% -5.7% EBITDA margin 22.3% 22.1% +0.2pp – FCF1 42 126 -66.5% – ROCE 17.2% 19.8% -2.7pp – 1 Free Cash Flow (FCF) here is the free cash to Solvay shareholders from continuing operations. Philippe Kehren, Solvay CEO 'The current macro-environment is uncertain and filled with challenges that were not foreseen at the start of the year. However, our resilient global and local to local business model will allow us to navigate these challenges. Our focus in the short-term is clear: accelerating the transformation of the company and disciplined spending to optimize cash generation. And I am pleased to see the ongoing progress in these areas, driven by our teams worldwide. I have every confidence in the ability of the Solvay team to succeed in the current environment and continue to deliver for all our stakeholders.' 2025 outlook The current demand environment is uncertain but the essential nature of its businesses makes Solvay resilient. The company expects the second quarter underlying net sales to be sequentially stable compared to Q1 2025, while underlying EBITDA would be sequentially down as Q1 included a one-off gain of c. €10 million and as Q2 will start to see an increase of the temporary stranded costs from the exit of the Transition Service Agreement with Syensqo. Solvay confirms the 2025 guidance as follows: Underlying EBITDA: €1.0 billion to €1.1 billion; Solvay currently expects to reach the lower half of the range (should current market conditions and currency exchange rates continue to prevail) Cost savings: €200 million by the end of 2025 Free cash flow to Solvay shareholders from continuing operations: around €300 million in 2025, of which the majority will be delivered in the second half of the year due to normal seasonality Capex: around €300 million, down from 'between €300 million to €350 million' Solvay is exposed to different currencies. We estimate that the average annual currency translation impact on underlying EBITDA is €15 million per 5 USD cents movement and €5 million per 25 BRL cents movement. Financial calendar May 13, 2025: Ordinary General Shareholders' Meeting May 19, 2025: final dividend: ex-date (subject to the approval of the Shareholders meeting) May 21, 2025: final dividend: payment date (subject to the approval of the Shareholders meeting) July 30, 2025: Second quarter and first half year 2025 earnings November 6, 2025: Third quarter and first nine months 2025 earnings Link to Solvay's financial calendar Details of analysts and investors conference call Time: May 8, 2025 – 2.30pm CEST CEST Registration: register to the webcast here . Contacts Media relations Investor relations Peter Boelaert +32 479 30 91 59 Laetitia Van Minnenbruggen +32 484 65 30 47 Valérie Goutherot +33 6 77 05 04 79 [email protected] Boris Cambon-Lalanne +32 471 55 37 49 Geoffroy d'Oultremont +32 478 88 32 96 [email protected] About Solvay Solvay, a pioneering chemical company with a legacy rooted in founder Ernest Solvay's pivotal innovations in the soda ash process, is dedicated to delivering essential solutions globally through its workforce of around 9,000 employees. Since 1863, Solvay harnesses the power of chemistry to create innovative, sustainable solutions that answer the world's most essential needs such as purifying the air we breathe and the water we use, preserving our food supplies, protecting our health and well-being, creating eco-friendly clothing, making the tires of our cars more sustainable and cleaning and protecting our homes. Solvay's unwavering commitment drives the transition to a carbon-neutral future by 2050, underscoring its dedication to sustainability and a fair and just transition. As a world-leading company with €4.7 billion in underlying net sales in 2024, Solvay is listed on Euronext Brussels and Paris (SOLB). For more information about Solvay, please visit or follow Solvay on Linkedin. Safe harbor This press release may contain forward-looking information. Forward-looking statements describe expectations, plans, strategies, goals, future events or intentions. The achievement of forward-looking statements contained in this press release is subject to risks and uncertainties relating to a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations, changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals, regulatory approval processes, all-in scenario of R&I projects and other unusual items. Consequently, actual results or future events may differ materially from those expressed or implied by such forward-looking statements. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Attachments Financial Report Press release Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. Business Upturn takes no editorial responsibility for the same. GlobeNewswire provides press release distribution services globally, with substantial operations in North America and Europe.
Reuters
08-04-2025
- Automotive
- Reuters
Solvay launches rare earth processing expansion amid China restrictions
LA ROCHELLE, France, April 8 (Reuters) - Chemicals group Solvay ( opens new tab launched an expansion on Tuesday to regain its previous strength in processing rare earths, hoping to attract customers after China imposed new barriers. On Friday, China implemented export restrictions on certain rare earth elements, a group of 17 minerals, as part of its sweeping response to U.S. President Donald Trump's tariffs. "What's happening is an incentive to develop those regional value chains," CEO Philippe Kehren told Reuters at the launch of the expansion of the 77-year-old plant in La Rochelle, France. "Now let's see if people really want to develop this value chain because if we want to invest further, we will need some comfort from the customers." Belgium-based Solvay has invested several million euros in an expansion that is kicking off with a low level of output, waiting for interest and orders from customers such as automakers before committing about 100 million euros ($109 million) for a full-scale expansion, Kehren said in an interview. Four decades ago, Solvay's rare earth processing plant in La Rochelle on France's Atlantic coast was one of the largest in the world, but production spiralled lower over the years as China ramped up cheaper output to now account for about 90% of the world's processed rare earths. Solvay, which also makes chemicals such as soda ash and speciality polymers used in cars and airplanes, will initially focus its rare earth expansion on two elements needed to make super-strong magnets that power electric vehicles and wind turbines - neodymium and praseodymium. The company eventually aims to supply 30% of Europe's processed rare earths demand for magnets by 2030, but it depends on demand from customers. "The issue is not capacity. We can adapt to what is needed," said An Nuyttens, president of Solvay's division that produces rare earth products. "The car manufacturers, the wind turbine manufacturers, those are the stakeholders that will make this happen or not." Eventual production could range from 2,000 to 5,000 metric tons of rare earth oxides, but Solvay does not envisage going further down the processing chain to making rare earth metals, alloys or magnets, she added. The 161-year-old company, like other firms seeking to compete with China, is hoping customers will pay a slight premium to diversify their supplies from China. Solvay also wants support from the EU, whose Critical Raw Materials Act that entered into force last year set ambitious 2030 targets for domestic production of critical minerals required for its green transition - 10% of annual needs mined, 25% recycled and 40% processed domestically by the end of the decade. ($1 = 0.9170 euros)
