Viridis secures Solvay buyer for Colossus rare earths output

Solvay agreement covers most Colossus output

Viridis Mining and Minerals Limited (ASX:VMM) has converted a key commercial relationship into a binding contract, signing Solvay group company Rhodia Operations SAS as the long-term buyer for upgraded, refined mixed rare earth carbonate from its Colossus project in Brazil.

The agreement runs from the start of production, targeted for 2028, through 31 December 2034, with lower commitments during the initial ramp-up. Binding take-or-pay obligations begin on the earlier of commercial operations or 1 January 2029. Minimum contracted volumes represent about 70% of Colossus’ forecast MREC production over the initial term, while Solvay holds a right of first offer over the remaining planned output. It is not required to buy volumes beyond its minimum commitments.

The contract arrives after the US$1.2bn DFS and funding, which reported a US$1.20 billion after-tax NPV and strategic equity commitments of up to US$120 million. Viridis says the binding offtake is another step towards finalising debt financing, but the project still needs to be financed, built, commissioned and ramped up before those production-linked economics can be realised.

Price floors support a conditional US$915 million revenue base

The headline number is approximately US$915 million of minimum revenue for neodymium, praseodymium, dysprosium and terbium across the six-year take-or-pay period from 2029 to 2034. That estimate is based on contracted minimum volumes, contractual price floors and applicable payability factors, and is expressly conditional on Viridis delivering the contracted material. Samarium, yttrium and gadolinium are excluded because the agreement does not apply price floors to those elements.

Pricing combines published rare earth indices with product-specific arrangements, although the detailed formulas and commercially sensitive parameters have not been disclosed. The structure gives Viridis exposure to prices above the floors and to additional sales, while preserving the value of qualifying government support and incentives received by either party. The previously announced Brazilian BNDES facility had reduced the estimated senior debt requirement, but the company has not disclosed final terms for the remaining project financing in this announcement.

Solvay relationship extends into Brazilian processing

The commercial arrangement also reaches beyond the sale of MREC. Viridis and Solvay are separately contemplating a Licensing and Technical Services Agreement under which Solvay would provide separation technology and technical support to help produce a higher-value refined MREC in Brazil. That agreement is not described as binding.

Since June, material from Viridis’ demonstration plant at Poços de Caldas has been supplied to Solvay’s La Rochelle facility in France for product qualification and development of commercial specifications. The proposed processing relationship is intended to increase the concentration of valuable magnetic rare earths and help Viridis capture more of the downstream value chain, but its success will depend on product qualification, technology deployment and the company’s ability to meet the contracted specifications.

For shareholders, the immediate change is commercial rather than operational: Colossus now has a named customer, minimum purchase obligations and contractual price floors. The harder test lies ahead in the unglamorous sequence of debt close, final investment decision, construction, commissioning and delivery against the volumes that support the US$915 million estimate.