Avalon Rare Metals Inc. (TSX:AVL,NYSEMKT:AVL) announced that it has entered into an agreement with Solvay SA (EBR:SOLB) under which Solvay will process Avalon’s rare earth concentrate into pure rare earth oxides. That arrangement will last for an anticipated period of 10 years from the start of deliveries to Solvay’s France-based rare earth separation and refining plant.

Solvay will also start providing Avalon with technical support to further optimize the design, engineering and commissioning of Avalon’s hydrometallurgical processing plant.

According to Avalon’s press release:

Avalon will ship a concentrate to La Rochelle containing 98.5% Rare Earth Oxide (‘REO’) and Solvay will return separated oxides of praseodymium (Pr), neodymium (Nd), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), lutetium (Lu) and yttrium (Y) ranging in purity from 99.5% to 99.99%. The Tolling Agreement also provides Solvay with the opportunity to purchase selected REO from Avalon. All rare earth products not purchased by Solvay will be sold by Avalon and delivered directly from the La Rochelle plant.

Don Bubar, Avalon’s president and CEO, said:

We are extremely pleased to have a highly experienced rare earth refiner like Solvay as a strategic partner. This Tolling Agreement greatly reduces the technical risk and costs associated with building, commissioning and operating a dedicated REE Refinery for the Nechalacho Project, making the whole project a less risky and more attractive investment opportunity. In addition, this reduces the potential for delays in initial product deliveries as perceived by our customers, who know they can rely on Solvay to produce the quality they require in a timely, proven, and reliable way. Solvay and Avalon also share similar values for environmental and social responsibility, which furthers our goal of becoming a sustainable operator.

Click here to view the full press release.