Solvay secures rare earths from Brazil

Résumé détaillé

Solvay has signed a long-term agreement to secure rare earths from Brazil, the Belgian chemicals group announced Wednesday. The agreement is with Australian mining company Viridis Mining and Minerals. The two parties had already signed a letter of intent in June.

From 2028, Viridis will supply Solvay's plant in La Rochelle, France, with neodymium, praseodymium, dysprosium and terbium—rare earths used to make permanent magnets. These magnets are used in wind turbines, electric cars and electronics, among other things. The agreement also provides for the supply of other heavy rare earths, including samarium, gadolinium and yttrium, which are also used in critical and medical technologies.

Viridis will supply Solvay with at least 70 per cent of the expected output from its large-scale Colossus mining project in Brazil. The Belgian group also has a right of first refusal over the remainder. "The agreement strengthens and diversifies Solvay's access to critical raw materials," the company said.

Solvay and Viridis are also negotiating a separate agreement under which the mining company would gain access to the chemicals group's technology and technical support, enabling it to produce purer intermediate products during processing.

Meanwhile, Solvay is continuing discussions with OneIM, a fund that invests in critical minerals. "If the talks lead to a definitive agreement, Solvay would transfer its rare earth activities to a newly established joint venture in which it would retain a significant minority stake," the company said.

Solvay's announcements came alongside its third-quarter financial results. The group posted underlying revenue of 1.03 billion euros for the period, down 3.3 per cent year on year. The decline reflected the impact of the war in the Middle East and lower demand for soda ash, Solvay's main product. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 26.6 per cent to 173 million euros.

The group's performance fell short of analysts' expectations, according to a Bloomberg survey. They had forecast stable organic revenue and underlying EBITDA of 182.3 million euros.

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