Key Takeaways:
Solvay SA has signed a Letter of Intent with Viridis Mining and Minerals to secure a strategic supply of rare earth materials from Brazil by 2028, as Western companies accelerate efforts to build a diversified critical minerals supply chain outside China.
Under the proposed agreement, Viridis would supply rare earth feedstocks from its Colossus project in Minas Gerais, Brazil, to Solvay's La Rochelle processing facility in France. The feedstock includes neodymium, praseodymium, dysprosium and terbium — the four magnet-grade rare earths essential for electric vehicle motors, wind turbines and defense systems — as well as samarium, gadolinium and yttrium used in electronics, medical and aerospace applications.
"This proposed transaction would mark a significant milestone in strengthening and diversifying our upstream supply chain," said An Nuyttens, President of Solvay's Special Chem business. "By partnering with Viridis, we would ensure another reliable source of raw materials that would allow us to maximize our processing capacity and meet the growing global demand for high-purity, sustainably processed rare earth elements."
Solvay's La Rochelle facility is one of the largest rare earth separation plants outside China and among the few sites globally capable of processing all 17 rare earth elements at industrial scale. The company plans to begin industrial-scale separation of dysprosium and terbium at the site by September 2026. Solvay maintains its target of supplying 30 percent of the European market for magnet-grade light and heavy rare earths by 2030.
Colossus Project Economics
Viridis is advancing the Colossus project with a capital cost estimated at $360 million to $370 million, which could rise to $400 million if lenders require additional working capital. The company recently inaugurated a rare earth research and processing center in Poços de Caldas, Brazil, designed to process up to 100 kilograms per hour of ore. The facility is expected to produce the first mixed rare earth carbonate from Colossus, containing neodymium and terbium, as the company targets steady-state production by late 2028.
Financing for the project is expected to be completed in the third quarter of 2026, according to Viridis Chief Executive Officer Rafael Moreno. The company has chosen to engage exclusively with Western buyers for offtake, avoiding Chinese counterparties.
"We took a stance pretty early on to go down the Western route," Moreno said. "As diversification of supply chains occur, we believe we will get better value for our products versus the suppression of prices that China is able to do when all the product goes there."
Western Rare Earth Supply Chain Takes Shape
The Solvay-Viridis partnership is the latest in a series of Western efforts to reduce dependence on China, which controls about 70 percent of rare earth extraction and 90 percent of processing, according to research by The Motley Fool. In the United States, USA Rare Earth Inc. commissioned Phase 1a of its commercial magnet production line in Oklahoma in the second quarter of 2026, targeting an annual run rate of 600 metric tons by year-end and 1,200 metric tons by early 2027. MP Materials Corp. produced a record 917 metric tons of neodymium-praseodymium in the first quarter of 2026, up 63 percent year over year, and began producing NdFeB permanent magnets at its Independence facility in Fort Worth, Texas, in December 2025.
The contemplated transaction between Solvay and Viridis remains subject to definitive documentation, regulatory compliance and other customary conditions. Solvay reported €4.3 billion in net sales in 2025 and employs more than 8,400 people globally.
This article is for informational purposes only and does not constitute investment advice.
