Neo Performance Materials’ subsidiary in Estonia, NPM Narva, also known as Magnequench Sintered Magnets, is finalizing a contract award to supply sintered rare earth magnets to a leading European Tier 1 supplier of electric vehicle traction motors. The award volumes represent approximately 35% of the finished magnet capacity of the new European facility being built by Neo.
Production revenues are projected for the second half of 2026 through 2033, with peak supply to the customer expected in 2029. An important commercial win for Neo, the award follows customer detailed design and technology specifications, cost quotations, deeply integrated supply chain, and a proven track record of producer-customer collaboration for the specific application the magnets serve. The award is subject to finalizing certain project contracts that are customary in these circumstances, said Neo.
Magnequench Sintered Magnet’s new manufacturing facility in Europe is set to produce 2,000 metric tons per year of magnet block in Phase 1, enough to supply approximately 1 to 1.5 million electric and hybrid vehicle traction motors. This is expected to be the first sintered magnet plant to come online outside Asia, with an explicit focus on supplying EV motor manufacturers in Europe and North America, where local production is expected to reach 40 million EV traction motors by 2035. The major building construction works for the new facility are on track to be completed in 2025, remaining on time and on budget.
Aligned with Neo’s integrated supply chain strategy, the new magnet facility is located close to the company’s existing operating rare earth separation facility. Construction of the magnet manufacturing facility began last year. The plant has received financial support from the European Union as it aims to build its domestic magnetic supply chain.
Neo is actively positioning to be a lead beneficiary of the secular changes driven by new government regulations and the EV industry’s transition towards local-for-local supply chain participants with global manufacturing, sourcing optionality, and proven automotive qualification experience, notes the company, citing data from Adamas Intelligence, the US Geological Survey, and customer discussions which estimate that approximately 90% of sintered magnet production is concentrated in China today. The EU Critical Raw Materials Act has set targets such as: 40% of rare earths material consumed annually to have been processed in the EU, 25% of rare earths magnetic material to be sourced from recycling in the EU, and no more than 65% of rare earth magnets to be sourced from a single jurisdiction outside the EU. Similarly, the US recently announced a new 25% tariff on rare earth magnets from China in effect from 2026 onward.
Historically, the Toronto-based company’s Magnequench division has supplied the automotive industry with rare earth magnetic materials for more than two decades with more than half of its sales attributed to the automotive industry. For more info, see www.neomaterials.com.
