In this list
Electric Power | Energy Transition | Metals | Petrochemicals | Shipping

INTERVIEW: Solvay proceeds with rare earths project, sees EV targets on track despite slowdown

Energy | Electric Power | Energy Transition | Renewables | Metals | Steel | Shipping | Containers

Market Movers Americas, June 5-9: Markets await direction from steel caucus, carbon credit auction

Electric Power | Electricity | Energy | Energy Transition

European Long-Term Power Forecast

Energy | Oil | Energy Transition

APPEC 2023

Energy | Electric Power | Energy Transition | Coal | Natural Gas | LNG | Electricity | Renewables | Emissions | Carbon | Nuclear

Indonesian minister denies outright LNG export ban, update likely in 2-3 months

Metals | Shipping | Energy | Energy Transition | Natural Gas | Oil | LNG | Coal | Steel | Steel Raw Materials | Renewables | Refined Products | Fuel Oil | Crude Oil | Emissions | Carbon

Commodity Tracker: 5 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

INTERVIEW: Solvay proceeds with rare earths project, sees EV targets on track despite slowdown

Highlights

EVs market development seen slowing this year

Speed of battery plant development seen crucial to targets

Rare earths project to source carbonate from Australia

  • Author
  • Diana Kinch
  • Editor
  • Alisdair Bowles
  • Commodity
  • Electric Power Energy Transition Metals Petrochemicals Shipping
  • Tags
  • Battery Materials Lithium United States Wind energy
  • Topic
  • Battery Metals Environment and Sustainability

Countries' targets for electric vehicle introduction seem on track despite expected slower growth in this area in 2023, Mike Finelli, president of growth initiatives at chemicals group Solvay, which is expanding in rare earths, said in a Jan. 27 interview.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"There are both opportunities and challenges in batteries and EVs," Finelli told S&P Global Commodity Insights. "The acceleration of the energy transition over the last two years has been staggering, but in 2022 we ran into some hiccups in supply chains which drove hyperinflation in metals and other product costs."

"These markets should now stabilize and will continue to grow in 2023 but slower than last year. Over the next 10 years there will be ups and downs in an overall positive trend... but the big question is if the battery companies and suppliers will be able to build the battery plants and raw materials plants quickly enough."

Solvay continues to prepare a new rare earths processing project for EV and wind turbine markets in La Rochelle, France, in which it is investing "tens of millions of euros," and which will supply material to magnet makers for "millions" of EVs, Finelli said in the interview.

An existing Solvay rare earths plant at La Rochelle currently serves the automotive emissions control and semiconductors markets, offering separation, recycling, purification, finishing and formulation facilities.

The new investment -- announced September 2022 -- will expand and upgrade the existing unit by adding production of separated rare earth oxides for permanent magnets to the site. The start-up date and capacity of the new plant have not yet been announced.

"We see no major change in EVs targets," Finelli said. These generally aim for EVs to take 50% of the market by 2030: targets of 45% in the US, more than 60% in the European Union and more than 60% in China by that date seem to be on track, he said.

But the risk is great. Most OEMs have big plans to convert their fleets to EVs and overall there could be a need to boost EV battery production nine-fold by 2030 to meet targets, Finelli said.

"Companies are investing in plants to supply other plants that haven't even been built yet," he said.

Government grants and support are therefore "absolutely critical" to help reduce risk as industries invest in energy transition projects, he said. Solvay itself gained an EU grant for a plant in Tavaux, France, which produces polyvinylidene fluoride (PVDF), a recyclable reinforced polymer or thermoplastic developed by the company and which is being used as a lightweight coating on lithium-ion batteries.

Mineral offtake from Australia

The new rare earths project will source rare earths minerals from Hastings Technology Metals in Western Australia and Solvay's product will be mainly neodymium to be supplied to magnet makers. Under a non-binding offtake memorandum of understanding signed last October, Hastings will initially supply 2,500 mt/year of mixed rare earth carbonate to the new project.

One of the primary aims of setting up the project is to create a European critical minerals hub as an alternative supply chain to China, which currently dominates 90% plus of the rare earths refining industry globally, Finelli said.

"We've learnt a lot over the last two years on supply chains. There have been geopolitical tensions around the world, trade barriers particularly between the US and China, it's been hard to get ships in and out of ports, massive shipping backlogs, COVID shutdowns in China preventing supplies getting out for maybe two months at a time and so we need local supply," he said.

"A lot of this is about China, we need to eliminate some of that [supply] risk," Finelli said, noting however that sales of Solvay's rare earths will not necessarily be limited to the EU market.

In the UK, Pensana expects to start production this year at a new rare earths processing and magnets production facility which will source rare earth minerals from Angola. The project has gained UK government support.

Opaque market

How rare earths pricing -- typically considered opaque -- may develop in coming months and years is currently unclear, Finelli admits. Rare earths prices are usually set in individual buyer-seller contracts.

"It's difficult to say if prices will become more transparent as rare earths commoditize: they're not close yet to being commoditized," he said.

Some automakers have started to research the use of externally-excited synchronous motors for their EVs, as these would not use rare earths and would therefore be free of the pricing volatility that has characterized the rare earths market for more than a decade.

"Different OEMs take different approaches," Finelli noted. "We're prepared, because of our portfolio, to go any direction the industry wants to go."

Learn more:

In the latest Platts Future Energy podcast, we uncovered the potential roadblocks facing the EV market in 2023. From lithium prices to government subsidies, learn how these factors may impact EV sales and the battery metals market:

Platts Future Energy Podcast on Spotify Platts Future Energy Podcast on Apple Podcasts Platts Future Energy Podcast on Google Podcasts