France Holds Key To Europe's Rare Earth Independence

The European Union (EU) has moved decisively to secure independence in rare earth elements (REEs) as it reacts to increasing global competition for these vital components for electric vehicles, wind turbines, and defense systems.

Today, China controls 85-90% of the global separation and refining of REES. More importantly, Beijing has demonstrated its ability to weaponize that dominance through export restrictions and licensing controls.

China’s Ministry of Commerce imposed new export controls on October 9 on certain rare earth elements, materials, and related technologies. Foreign export operators must obtain a dual-use item export permit issued by the Ministry before they can export the items to countries outside of China.

Politically, senior EU officials have framed a coordinated transatlantic response to China's restrictions as essential. European Commissioner for Trade Maroš Šefčovič has called China's tightened controls "unjustified" and a "critical concern.” Šefčovič has urged G7 coordination on accelerating projects to extract and process critical minerals outside China.

US President Donald Trump threatened 100% tariffs on Chinese goods and new export controls on "critical software." Treasury Secretary Scott Bessent described it as "China versus the world" with a "bazooka" aimed at global supply chains. He accused Chinese negotiator Li Chenggang of being "slightly unhinged" and using "incendiary language."

Despite the name, the class of 17 rare earth elements is not geologically scarce. Their "rarity" stems from low ore concentrations, complex mineralogy, and the concentration of processing and refining capacity in China. The government regulations in the EU and the US have made it difficult to mine them domestically.

Chinese Restrictions Raise Fears Among German Automakers

Chinese restrictions have ricocheted through global supply chains. It has raised input costs and threatening production schedules for automakers, turbine OEMs, and defense primes.

The German Association of the Automotive Industry (VDA, said China's new regulations would have "far-reaching consequences for deliveries of the affected products to Germany and Europe." The country's main car industry lobby added that their onward transport will be impacted.

"Through extraterritorial export restrictions on rare earths and the associated processing technologies, China is further expanding its control over value chains—especially in the field of permanent magnets—from raw material supply and processing technologies to the transfer of know-how," a VDA spokesperson told S&P Global.

While manufacturers maintained production when China restricted supplies over the summer, reserves of REEs are close to depletion, according to Roberto Vavassori, chairman of the Italian auto part maker lobby ANFIA.

EU Reacts to Escalating Rare Earths Trade War

For Brussels, the lesson is clear. Diversify supply, onshore critical processing, and build recycling at scale. This is the goal behind the EU's Critical Raw Materials Act. The measure aims to source, process, and recycle a larger share of strategic materials domestically or from trusted partners.

Denmark's Foreign Minister Lars Rasmussen argued for a united and "tough" EU response, preferring diplomacy over tariffs. Through alignment with the United States and other G7 partners, Rasmussen believes it is the best way forward.

Beyond the blend of long-term offtake agreements and support for European refining capacity, he called for the EU to pursue joint ventures spanning mining, chemical separation, magnet manufacturing, and recycling.

The EU’s REE effort must account for sustainability. Addressing mining practices, waste leakage, and practicing low-emissions processing means Europe should boost its capacity and lead in cleaner process engineering and circularity.

France Is Europe's Lead Partner on Rare Earths

France has emerged as the EU's most advanced platform for rare earth independence. It has a coherent policy mix, a strong industrial base, and most importantly, abundant low-carbon electricity from nuclear power.

Paris's agenda has dovetailed with EU priorities, with a rare earth ecosystem developing around Lacq in the Pyrénées-Atlantiques. In this part of southwest France, multiple projects have coalesced. These included chemical separation, recycling, magnet metals and alloys, and long-term supply agreements with international partners.

French state support, alignment with the EU's Critical Raw Materials Act, and openness to strategic co-investment from trusted allies (notably Japan) have accelerated timelines.

Notably, France has not pursued mining. It has moved into higher-value bottleneck processes — separation, purification, and magnet recycling. That is where China's dominance is most acute and where European added value and IP can compound over time.

Carester and Caremag, Core of France's Rare Earth Efforts

Carester, a rare earth process-engineering and refining specialist, has a growing operational footprint in Lacq. The firm has positioned itself as the reference partner for companies exploiting rare earths, qualified across the study, design, and optimization of production chains.

The firm's expertise has focused on environmentally improved separations, production of radioactivity-free concentrates, and magnet recycling to recover high-purity oxides. The approach, with no liquid effluent discharge and a CO2 impact more than 50% lower than conventional peers, has aligned with Europe's decarbonization imperatives.

Meanwhile, Carester's subsidiary, Caremag, has started building a significant rare earth separation and recycling plant in Lacq. This anchors Europe's heavy rare earth capacity.

When operational (scheduled for late 2026), the plant would produce approximately 600 tons per annum (tpa) of Dy/Tb oxides — around 15% of global production — plus roughly 800 tpa of neodymium and praseodymium oxides. It will process about 5,000 tpa of mining concentrates and recycle around 2,000 tpa of magnets, combining primary and circular feedstock streams to bolster resilience.

""We realized we had a resource right in front of us – all this end-of-life equipment," Carester founder and CEO Frédéric Carencotte said. "So, we decided to launch our own industrial project, based on recycling. Europe has also supported us significantly."

The recycling project received a funding package of €216 million, including €106 million from the French government and €110 million from Japanese partners JOGMEC and Iwatani.

Carester Scales to New Markets

Carester has also scaled its services business internationally. It has agreed to provide engineering, construction, and commissioning services for Brazilian Rare Earths' (OTCQX:BRELY) (BRE) planned integrated separation plant at the Camaçari Petrochemical Complex in Bahia, Brazil.

In parallel, Carester and BRE have signed a 10-year offtake and technical collaboration that secures heavy rare earth feedstocks for Caremag and supports BRE's downstream ambitions. The agreement envisions up to 150 tpa of separated dysprosium and terbium oxide production, aligning with Caremag's French operations.

The partnership makes sense for three reasons:

• It diversifies heavy rare earth supply away from China by linking Latin American resources with European separation capacity.
• It pairs upstream feedstock with proven downstream process engineering, compressing time-to-market.
• It underwrites long-term volumes critical for European EV and wind supply chains, giving OEMs confidence to localize magnets.

Caremag has already pre-booked a significant share of its output and signed long-term contracts. Beyond the Japanese partners like JOGMEC and Iwatani, the firm has a ten-year supply agreement with the automotive giant Stellantis. By providing 3,400 tons of material over that time, Caremag will help the car maker achieve its goal of carbon neutrality by 2038.

Carester has no current IPO plans. Given that Brazilian Rare Earths surged over 20% after the deal announcement, a potential IPO would raise interest from the investment community.

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