The recent joint move by a US critical minerals firm and a Paris-based infrastructure fund represents a notable step toward diversifying global supply of rare earths. Together they are committing about US$93 million to a French specialist in recycling and separation technologies, buying identical minority positions that secure capital and long-term commercial ties. The funds are earmarked for Carester’s flagship Caremag facility in Lacq, southern France, which is being built to combine recycled magnets and mined concentrate into separated oxides used by magnet makers and alloys producers.
This transaction links investors, processing capacity and downstream manufacturing in a coordinated supply response.
The deal pairs two parallel investments of US$46.8 million each, and it comes with a suite of commercial arrangements including a supply pact, an offtake agreement and an intellectual property licensing framework. These contractual elements aim to guarantee feedstock access and product offtake for both partners over extended terms, while preserving Carester’s operational independence. By combining capital and long-term agreements, the investors not only underwrite the plant construction but also lock in processing rights and purchase options that underpin long-term strategic planning for critical magnet materials.
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Caremag plant capacity and expected output
The Lacq facility is designed to handle 7,000 metric tons of feedstock each year, split between 2,000 tons of recycled permanent magnets and 5,000 tons of mining concentrate. At planned full operation the plant is projected to deliver intermediary and finished outputs including 800 tons of neodymium-praseodymium (NdPr) oxide, 500 tons of dysprosium oxide and 100 tons of terbium oxide annually. Commissioning is scheduled for late 2026, with the target of reaching full run rate in early 2027. These volumes are significant because they translate directly into magnet-grade material availability for alloy makers and magnet manufacturers.
Commercial rights and supply chain integration
As part of the transaction, one investor secures a long-term right to buy product from the plant: the offtake arrangement grants the buyer the option to purchase up to 50 percent of the heavy rare earth oxides that are generated from the specific feedstock it contributes. The agreements span 15 years for both supply and offtake, creating multi-decade certainty for raw material flows. These commitments are paired with an IP licensing mechanism to align technology use and product specifications, while enabling downstream links to alloy production and magnet manufacturing in Europe and beyond.
Linking mines to magnets
The investment also provides immediate processing flexibility for mine projects such as the Round Top deposit in Texas. Excess heavy rare earth concentrate from Round Top — or other sources the US investor develops — can be sent to the Lacq plant for separation, offering a European route while domestic processing capabilities scale up. The buyer has already integrated downstream capacity through its 2026 acquisition of Less Common Metals (LCM), a European alloy-making subsidiary, creating a shorter pathway from primary output to finished magnet alloys and helping realize the so-called mine-to-magnet strategy.
Why this shifts the market dynamic
Currently, nearly all separation and final processing for key heavy rare earths is performed in China, creating a global bottleneck. The projected output of dysprosium and terbium from the Lacq plant represents roughly 15 percent of today’s global production for those elements, according to statements from the US investor’s leadership, putting material-scale processing capacity into Europe. By establishing an alternative processing node and tying it to upstream feedstock and downstream alloy and magnet usage, the partnership seeks to reduce reliance on a single geography and add resilience to the critical materials supply chain.
Participants and strategic context
Carester was founded in 2019 by former Solvay executive Frédéric Carencotte and has already attracted significant backing, including roughly US$252.7 million from the French government and strategic partners such as Japan France Rare Earths. The European investor’s contribution is the second from its Critical Metals Fund, a vehicle that the French state helped seed under the France 2030 investment plan to shore up materials needed for the energy transition. Together the capital, contracts and technology signal a coordinated industrial effort to localize crucial processing steps for permanent magnets.
Securities disclosure: the author of this article holds no direct investment interest in any company mentioned. The transaction described secures a new processing pathway in Europe while aligning long-term commercial relationships intended to feed magnet supply chains without inventing dates or details beyond public announcements.
