Solvay secures Brazilian rare earth sources; US heavily invests in domestic rare earth industry

The global rare earth industry chain is accelerating its restructuring. US and European chemical companies, along with local mining enterprises, have successively finalized upstream resource cooperation and increased investment in smelting and magnetic material capacity construction. Relying on three paths—Brazilian mineral resources, local factory expansion, and government financial support—they are enriching raw material supply and promoting a diversified layout of rare earth supply. Meanwhile, China has implemented new regulations on rare earth export management in accordance with rules. In May, the Chinese and US economic and trade teams conducted pragmatic consultations on rare earth-related issues to jointly discuss reasonable concerns.

I. Solvay Partners with Brazilian Miner to Perfect Raw Material Layout and Build a Brazil-France Cross-Border Rare Earth Industry Chain

On June 1, global chemical giant Solvay announced the signing of a letter of intent with Brazil's Viridis Mining and Minerals, finalizing a framework for long-term rare earth raw material supply. The plan aims to achieve stable raw material delivery by 2028 at the latest, consolidating the company's ability to guarantee a diversified supply of key rare earth raw materials and enhancing the risk resilience of its supply chain. Subsequently, both parties will advance negotiations for a formal purchase agreement, and the implementation of the cooperation remains subject to standard conditions such as signing approvals and compliance reviews.

According to the cooperation agreement, Viridis will rely on Brazilian local mineral resources to supply rare earth ores directly to Solvay's La Rochelle plant in France. Solvay will export mature rare earth separation and deep processing technologies to facilitate the efficient conversion of Brazilian minerals. After purification, the raw materials produce permanent magnet essential rare earth oxides such as neodymium, praseodymium, dysprosium, and terbium, as well as bulk heavy rare earth categories like samarium, gadolinium, and yttrium. These products are widely used in fields such as new energy vehicle drive motors, wind power equipment, high-end electronics, and aerospace and defense equipment.

The La Rochelle site is one of the largest rare earth separation complexes globally outside of China, capable of industrially processing all types of rare earth resources. Existing production lines utilize European recycled rare earth scrap to produce permanent magnet raw materials. The company plans to achieve industrial mass production of dysprosium and terbium at the plant by September 2026, with a long-term goal of capturing 30% of the European market share for light and heavy rare earths for magnets by 2030. Previously, in November 2025, Solvay signed a contract with US magnetic material manufacturer Noveon to regularly supply neodymium-praseodymium and dysprosium-terbium rare earth oxides starting in 2026, guaranteeing magnet production for the US side. With the successive landing of Brazilian resources and North American downstream orders, Solvay has formed a globalized division of labor layout featuring Brazilian upstream mining, French mid-stream smelting and separation, and European and US terminal manufacturing. The addition of overseas mining sources further releases the processing capacity of the French plant, matching the continuously rising rare earth demand of the global new energy industry.

II. US Invests Heavily to Bolster Local Full Rare Earth Chain; Government-Enterprise Linkage Accelerates Localization of the Industry Chain

Driven by the US policy on localizing key minerals, local rare earth enterprises are seeing the landing of significant policy funds. On June 3, US Rare Earths (USAR) signed a definitive agreement with the US Department of Commerce, securing a total of $1.6 billion in supporting funds. This includes $277 million in direct federal grants and $1.3 billion in loan guarantees under the CHIPS Act, with funds disbursed in batches based on project milestones. Combined with $1.5 billion in private financing planned for early 2026, the company will have approximately $3.5 billion in total available project capital.

Backed by substantial funding, USAR has launched a dual-track layout of global resource mergers and acquisitions and local capacity expansion: overseas acquisition of the Serra Verde rare earth mine in Brazil and equity investment in French heavy rare earth processing company Carester to lock in offshore raw materials, while locally deepening the development of the Round Top rare earth mine project in Texas. The project plans to achieve commercial production by 2028. Once the mine is operational, it can industrially extract over a dozen key scarce minerals including dysprosium, terbium, and yttrium, filling the gap in US local heavy rare earth extraction.

On the capacity front, through its subsidiary LCM, USAR is relocating annual production capacity of ten thousand tons of rare earth metals and alloy casting back to the US. It is expanding production bases in Oklahoma and South Carolina, targeting an increase in annual production capacity of neodymium-iron-boron permanent magnets to 10,000 tons, thereby closing the loop of the entire industry chain from mining beneficiation, rare earth oxide extraction, and rare earth metal smelting to finished magnet manufacturing.

Extension: Global Rare Earth Supply and Demand and Bilateral Economic and Trade Communication

As an essential raw material for the new materials industry, rare earths are the foundational raw material for new energy, military industry, and precision manufacturing. China is the core production region for the global rare earth full industry chain. In 2025, the total domestic rare earth mining index was 145,000 tons, a slight increase of 5% for the year. The industry implements total volume control on mining quotas, with light rare earths accounting for over 90%. The supply of high-end heavy rare earths is relatively tight, and there is a structural gap between market-oriented supply and demand. The concentration of domestic mining quotas is high, with leading enterprises controlling major resources and limited production elasticity. In October 2025, China optimized rare earth export control rules, legally regulating the export approval of rare earth products, supporting technologies, and overseas processed goods containing rare earths. This is a market-oriented measure based on resource management and compliance control.

Although the US retains primary rare earth mineral deposits, it lacks sufficient supporting capacity for smelting, separation, and magnet deep processing, and its permanent magnet products rely heavily on external imports. In early 2026, the White House classified deep-processed rare earths as national security-critical minerals, accelerating investment in the autonomy of the full industry chain.

On May 12–13, 2026, the Chinese and US economic and trade teams held special talks regarding rare earth export controls. The Chinese side clarified that relevant rare earth control measures are compliant with laws and regulations, and that export license applications for compliant civilian needs are processed in an orderly manner. Both parties consulted to properly handle each other's reasonable demands and jointly maintain the stable operation of the global rare earth industry chain.