In Minas Gerais, Brazil, a test equipment capable of processing 100 kilograms of ore per hour is trying to break through an industry barrier built by 78% of global smelting separation capacity.
At the end of May 2026, the Australian mining company Viridis unveiled its Colossus rare earth R&D and processing center here. Company CEO Rafael Moreno made it clear: “All current substantive negotiations are focused on the European and American markets, and procurement-level communications with Chinese buyers will not be initiated for the time being.” This statement marks the West’s attempt to build an independent rare earth supply chain and has entered a critical stage from strategic declaration to project implementation.
Viridis has planned a clear but challenging timeline for the Colossus project: in 2026, the R&D processing center will be put into operation, with a designed capacity to process 100 kilograms of ore per hour and an annual output of 3,000 tons of mixed rare earth carbonates (MREC).
The center’s core mission is to complete final feasibility studies and present samples to potential buyers.
In 2027, the construction of an industrial separation plant will be launched.
In 2028, the project will achieve commercial mass production, with a target annual production capacity of 9,500 tons of rare earth oxides (REO), and a total investment scale of approximately US$360-400 million.
In order to realize the closed loop of “Brazilian mining – European separation – European and American applications”, Viridis signed a letter of intent for cooperation with French chemical giant Solvay on June 2, 2026.
According to the agreement, starting from 2028, MREC produced in Brazil will be shipped to Solvay’s plant in La Rochelle, France for separation and purification.
Solvay’s goal is to occupy 30% of Europe’s supply of high-end magnetic grade rare earths by 2030.
However, there is an order of magnitude gap in the technical foundation of this Western route compared with China.
Relying on the cascade extraction technology invented by Academician Xu Guangxian, China has purified rare earths to 6N level (99.9999%) or even higher purity.
The common rare earth separation technology in Europe and the United States is still stuck at the 3-4N level, and the purity gap is at least two orders of magnitude.
This technological generation gap is directly reflected in production capacity and cost.
In terms of production capacity comparison, China’s total rare earth smelting and separation production capacity accounts for 78% of the world’s total, and its high-end functional material production capacity accounts for 83%; in 2024, global rare earth production will be 390,000 tons, and China’s output will be 270,000 tons, accounting for 69.2%.
In comparison, the first separation pilot line built in the United States in 2023 has an annual processing capacity of less than 500 tons and a product purity of only 99.9%.
Viridis’ planned annual production capacity of 9,500 tons is equivalent to only 2.4% of China’s total output in 2025.
In terms of cost gap, the production cost of light rare earths in China is US$15-25 per kilogram, while the cost of similar products in the United States is as high as US$40-60, which is 2-3 times that of China.
Recently, China has discovered dissociated rare earth minerals in the Northeast. Through physical beneficiation, the mining cost has been reduced to 32,000 yuan per ton, which is only 40% of the mining cost of traditional ionic ores in the south (80,000 yuan/ton), further consolidating the cost advantage.
The West’s efforts to promote supply chain diversification are facing inherent contradictions that are difficult to reconcile.
Viridis received US$50 million in intended financing from the Australian Export Credit Agency, with the core condition being that “products must not enter the Chinese supply chain.”
This deep binding of capital to geopolitics, although it provides start-up capital, also locks in market choices and gives up the world’s largest rare earth consumer market.
At the same time, the lack of capabilities in emerging producing countries makes the “independent supply chain” still highly dependent on external technology.
Brazilian President Lula announced in May 2026 that foreign companies developing rare earths must complete processing in Brazil.
But the reality is that Brazil has almost no industrial refining capabilities, and its rare earth production accounts for only 1% of the world.
The high-end separation link of the Viridis project still relies entirely on France’s Solvay.
After the United States acquired the Brazilian Serra Verde Group for US$2.8 billion in April 2026, its technological upgrades also require external support.
Forecasts from industry consultancies paint a clear picture.
McKinsey & Company analysis pointed out that by 2035, the supply capacity of countries other than China in critical heavy rare earths such as dysprosium and terbium will still be difficult to meet 20% of global demand.
Benchmark Mineral Intelligence also predicts that China’s dominance in the field of heavy rare earths will continue until at least the mid-2030s.
The West’s attempt to build a “mineral NATO” is facing challenges from internal differences among allies.
Bloomberg analysis pointed out that Japan is unwilling to take measures that may further anger China, while some European leaders are worried that the US-led alliance may distort the market and raise costs.
This disagreement weakens the political synergy to collaboratively build alternative supply chains.
In contrast, China has formed a vertically integrated system from mining, separation, magnetic materials to terminal manufacturing.
More than 92% of the world’s NdFeB permanent magnets are manufactured in China.
The industrial clusters formed in Baotou and other places have resulted in 8 of the top ten rare earth magnetic materials companies in the country settling here. The industrial output value target in 2025 is aimed at 130 billion yuan.
This integration advantage of the entire industry chain is not only related to cost, but also constitutes an ecosystem that responds quickly to the market and continues technology iteration.
Viridis’ Colossus project is a concrete practice of the West seeking strategic independence in the field of rare earths.
The timetable it has set and the partnerships it has built all demonstrate efforts that go beyond previous efforts.
However, from the annual production capacity target of 9,500 tons to China’s annual output of 270,000 tons; from relying on Europe’s 3-
From 4N-level separation technology to China’s independently controlled 6N-level purification capabilities; from US$50 million in financing with political conditions, to China’s huge domestic demand market and complete industrial ecology – these data collectively point to a conclusion: in the foreseeable future, any “Western route” that attempts to bypass China’s rare earth industry chain will be difficult to form a truly effective arbitrage space in terms of scale, cost and efficiency.
This competition to reconstruct the supply chain is not only about minerals, but also a comprehensive contest about technology accumulation, industrial ecology and time cost.
