Europe’s first large‐scale production plant for rare‐earth magnets is opening for several interlinked reasons, mostly tied to strategic, economic and environmental priorities. Here are the main motivations:
Why the plant is opening
Reducing dependence on China
Europe currently imports ~98% of its rare-earth magnets from China.
That poses supply chain risk, especially for critical sectors like automotive (especially electric vehicles), renewable energy, electronics and defence.
High and growing demand
Demand for rare-earth magnets is projected to triple over the next decade in Europe, rising from ~22,000 tonnes/year to ~60,000 tonnes.
These magnets are essential components in EV motors, wind turbines, motors in appliances, etc.
Neo Performance Materials
Strategic autonomy / critical raw materials
EU policy is pushing to “localise” more of the whole supply chain: mining, processing, magnet production. The idea is to have more capacity within Europe for rare-earth production and magnet manufacture.
As part of that, the EU has a target that by 2030, a certain percentage (for example ~40%) of processing of critical raw materials should be done within the EU.
Green transition, renewable energy, and carbon neutrality
To support electric vehicles, offshore wind turbines, and general decarbonisation, industries need reliable access to rare-earth magnets. Having local magnet production helps ensure the green transition isn’t held back by supply chain bottlenecks.
Also, local production and recycling can help reduce emissions associated with shipping and reduce environmental impact.
Policy support and funding
The plant got substantial support via an EU grant (~€18.7 million) plus a Canadian credit line.
Government and EU-level policies (for example, the EU’s Critical Raw Materials Act) are pushing for more domestic capability in strategic materials.
Economic opportunity & regional development
The plant is located in Narva, Estonia, a region shifting away from coal, oil‐shale, or high‐CO₂ industries. This provides new industrial jobs, investment, and helps with just transition (regions affected by the move to green energy).
Companies like Neo Performance Materials have signed contracts with big customers (e.g. Bosch, Schaeffler) which shows there is market demand and that this investment is viable.
This section of assets is a hedge against equities and looks like a sure-bet for future growth although of course never guaranteed – ed.
