Europe’s First Mine-to-Magnets Supply Chain

Neo Magnequench, a division of Neo Performance Materials Inc. (“Neo” or the “Company”) (TSX: NEO), recently broke ground on construction of the first rare earth magnet manufacturing facility in Europe designed to produce specialized rare earth permanent magnets for use in electric vehicles, wind turbines, and other clean energy technologies.

Based in Narva, Estonia, the plant expects to begin production of permanent rare earth magnets in 2025 sufficient to support the manufacturing of approximately 1.5 million electric cars. Neo’s expected Phase 2 production of 5,000 tonnes/year can support the manufacturing of 4.5 million electric cars.

The groundbreaking event included speeches from notable officials from Estonia, including Narva Mayor Katri Raik, Estonian President Alar Karis, Estonian Investment Agency Director Joonas Vänto, Minister of Economic Affairs Tiit Riisalo, Minister of Regional Affairs Madis Kallas,  Also participating were European Union representatives including Deputy Director General of EU Commission’s DG GROW Maive Rute and European Commission President Ursula von der Leyen.  Also attending the event were ambassadors and embassy staff from multiple countries with commercial interests in Neo’s operations in Estonia, such as Canada, the United States, Germany, and France.

Neo’s nearby rare earth separations plant in Sillamäe, Estonia will provide rare earth feedstock to the Narva plant from the U.S. and other sources. These high-purity magnetic rare earth oxides will be transformed into sintered neodymium-iron-boron magnets. Neo officials are excited to foster a more integrated supply chain for sintered rare earth permanent magnets developed from recycled end-of-life magnets and manufacturing swarf.  This process will be the first of its kind in Europe.

Sintered rare earth permanent magnets are used in a wide variety of technologies that increase energy efficiency, reduce carbon dioxide emissions, and help enable the European Union’s efforts to achieve carbon neutrality.  These magnets are especially integral to the drivetrains of the majority of electric vehicles manufactured today, where they increase the power and efficiency of the motors.  Other rare earth magnets made by Neo are used in electric motors in battery electric, hybrid electric, and conventional vehicles, as well as in electronics, water circulation pumps, high-efficiency home appliances, and many high-efficiency industrial applications.

Neo President Rahim Suleman, who will take over as CEO of Neo Performance Materials in July, said:  “Neo is embarking on a new chapter of serving the automotive and wind energy industries.  We are building the first rare earth permanent magnet manufacturing facility in Europe, with the specifications of our German, French, and other European OEM and Tier 1 customers in mind, suitable for traction motors for electric vehicles.”

Greg Kroll, who leads Neo’s Magnequench business unit, said:  “Market interest in our plans to produce permanent rare earth magnets in Europe continues to be very robust, and we look forward to being able to serve customers across rapidly expanding European automotive and wind energy markets.  We intend to leverage our long experience in the rare earth magnetics industry, and our team’s decades of specialized knowledge in this sector, to build and operate a state-of-the-art, high-efficiency facility that maximizes circular economics through recycling of end-of-life magnets and recovering and recycling magnet ‘swarf’ material created in the manufacturing process.”

Notable Quotables

Constantine Karayannopoulos, CEO of Neo Performance Materials

“We are proud to be the anchoring investment that will help Estonia become a hub for critical raw material supply chains for technologies that are necessary for Europe’s transition to electro-mobility and energy security from renewable sources. This value chain approach to investment attraction and industrial ecosystem development is a bold vision that is supported by the high competency and speed-to-execution of European Commission, Estonian, and municipal government leaders. With the support of the European Union’s Just Transition Fund, our company is de-risking rare earth supply chains in Europe and globally, which in turn de-risks a million jobs in the transition from the internal combustion engine to electric vehicles in Europe and the production of wind turbines for Europe’s energy security.”

Claire Kennedy, Board Board Chair, Neo Performance Materials

“On behalf of Neo Performance Materials’ Board of Directors and our shareholders, it is an honor and a pleasure to share this special occasion with all of you today. Everyone gathered here has a role in the success of this project — a project that will not only serve Neo’s customers in the Electric Vehicle and Wind Turbine value chains, but will also serve the European Union’s goal to develop domestic industrial capacity in areas of strategic importance by making Ida Viru County a destination for skilled jobs and investment — indeed, make this County and Estonia a highly strategic jurisdiction for rare earth supply chains in Europe. Neo’s magnet project is the first success story – but I’m confident not the last – of the Canada-EU Strategic Partnership on Critical Raw Materials, an accomplishment we are proud of as a Canadian company operating globally, with our shared values of excellence, integrity, and deep commitment to social and environmental responsibility.”

Ursula von der Leyen, President of the European Commission

“The rare earth magnets that will be produced here are indispensable to growth and innovation in sectors like electric mobility, wind energy, and microelectronics. They promise lighter batteries, less consumption of critical materials, and higher energy efficiency. To guarantee supply, we are co-developing this facility with a rare earth mine in Greenland.  And this is another first: it is Europe’s first mine-to-magnet supply chain.  Neo Performance Materials informed me that, with their worldwide experience, they have never seen such a fast issuance of permits as for this facility. And this is Europe at its best. With the European, the national and the local institutions all equally on board, with fast, decisive action, with a clear vision for the future, the Union of the future is being won right here in Narva. Today, all Europe looks at you with pride and hope.”

You can see President von der Leyen’s video address to the groundbreaking event here:  https://ec.europa.eu/commission/presscorner/detail/fr/speech_23_3574