European industrial groups are turning their eyes to France’s developing rare earth ecosystems in order to reduce their dependence on China for key minerals used in electric vehicles and wind turbines.
Beijing reversed the supply chain of minerals essential to the energy transition and fostered concerns about an imminent shortage of permanent magnets when it retaliated President Donald Trump’s tariffs in April.
The restrictions reduced China’s rare earth magnet exports by 51% compared to that month, according to consulting firm Wood Mackenzie.
France has become a major European player in its efforts to break down its dependence on China. There are more “strategic” important raw material projects than any country based on the EU scheme aimed at increasing European supply of certain metals, with nine of the total 47 projects related to rare earths.
But it is still far behind China, with some companies saying they were overwhelmed by the influx of demands from automakers and industrial groups looking for materials to be used to make permanent magnets for applications such as fighter jets, wind turbines and EVs.
“We are pleased to announce that we are committed to providing a wide range of services,” said Eric Petit, CEO of Magriezeruth, a permanet magnet manufacturer that is developing one of the projects supported by the EU’s key raw materials laws.
Rare earth minerals are not particularly rare. The challenge is finding economically viable deposits for the mine © David Becker/Reuters
Solvay Silica, a unit of a Belgian chemical company, has been flooded with “desperate” pleas from customers who are concerned that a shortage of rare earths will leave them with “immediate problems,” the president said, Nuyttens. “We call every day.”
Some executives said many niche trading houses buying and selling rare earths have become “greedy” and are citing prices up to 10 times higher than “normal.”
Reliance on China has long been perceived as a key vulnerability by EU policymakers, as the country supplies 98% of its demand for EU rare earth magnets, according to data from the European Commission.
Minerals are not particularly rare. The challenge is finding sediments that are economically viable for me. Separating and handling them is complicated, and China has become dominant by investing heavily throughout the supply chain. The company benefits from less stringent environmental rules and state support, which Western rivals struggle to compete.
The French location at the heart of European efforts to develop the rare earth industry comes from its history as a key processor of metals before China surpasses it. It also has abundant and relatively inexpensive nuclear energy, and investors are being seduced by President Emmanuel Macron’s push for reindustrialization.
Solvay has owned a factory in La Rochelle, on the west coast of France since 1948, producing as many as 15,000 tons of rare earth oxides per year during its heyday of the 1980s and 1990s. In April, it said it would restart production of heavy and light rare earth oxides for advanced magnet technology, using mining materials from non-Chinese etymology.
Rhône-Poulenc, a French chemical group purchased by Solvay in 2011, gained nearly 50% global market share in rare earth processing until the mid-1980s, said Emmanuel Hasch, a researcher at the French Institute for International Strategic Studies (IRIS).
“Expertise is a big part of the puzzle, and there are a lot in France,” said Caroline Messecar, analyst at Fastmarkets at Price Reporting Agency.
Carester, a Lyon-based startup founded in 2019, has been on track to produce heavy rare earth oxides from non-Chinese sources since 2026, said its president Frédéric Carencotte.
In March, Caremag, a subsidiary of Carrester, secured 226 million euros from Japanese investors and the French government for its rare earth recycling and refinery facility in LACQ, southern France ©Romain Perrocheau/AFP/Getty Images
Caremag, a subsidiary of the company, secured 226 million euros from Japanese investors and the French government under CRMA in March for its recycling and refinery facility in LACQ, southern France. The project allocates 70% of the expected production to customers, including Carmaker Stellantis, for 10 years.
The less common UK-based metal is planning a 110 million euro plant in the same region to turn oxides into rare earth metals and alloys that enter permanent magnets. The factory said it is subject to LCM financing and long-term buyer terms.
One of the few companies outside China capable of producing rare earth metals and alloys, LCM is a critical step between the separation of rare earths and their use in permanent magnets used in automobiles and turbines, working “24 hours a day” to support its customers.
Magley Sauce’s spin-out from France’s National Centre for Science and Research (CNRS), said domestic industry needs more political and financial support and buyers ready to pay premiums for locally made magnets.
“We are very pleased with the support, but unfortunately it’s not enough compared to what’s happening in the US or the support in China.”
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The company, which raised 200 million euros from investors and public funds to produce permanent magnets from recycled materials, hopes to produce 1,000 tonnes of magnets per year by 2027.
French government officials said the country would like to revisit the EU’s CRMA and introduce stockpiling requirements, as claimed by companies including Solvay.
Despite France doing what is needed now, Europe is “a long way from putting a fully developed value chain in place,” said Edoardo Liguetti of the European Centre for Policy Studies, a think tank.
Still, European Commission President Ursula von der Leyen wanted to tell him progress at the recent G7 conference in Canada.
She said, “It was manufactured in Estonia by a Canadian company using raw materials sourced from Australia.
