Highlights
- Neo Performance Materials wins $50 million supply contract with European EV traction motor manufacturer.
- Facility located in newly launched Narva, Estonia.
- First sintered rare earth magnet facility outside Asia in decades.
- Initial capacity of 2,000 tonnes with plans to expand to 5,000 tonnes.
- Strategic move to diversify magnet sourcing outside China.
- Supports Europe’s growing electric vehicle industrial base.
Neo Performance Materials Inc (TSX: NEO | OTCQX: NOPMF) has announced a significant new supply contract with a European Tier 1 electric vehicle (EV) traction motor manufacturer, linked to a major unnamed automotive OEM. The deal marks another commercial win for Neo’s recently launched magnet production facility in Narva, Estonia. Estimated to be worth approximately $50 million over the life of the project (based on current rare earth market pricing), the contract adds to a growing list of traction motor magnet awards secured by the company in recent months.
The Narva plant—co-funded by the European Union’s Just Transition Fund (opens in a new tab)—is now producing and shipping qualification samples. It is notably the first sintered rare earth magnet facility to launch outside of Asia in decades. Phase 1 capacity is set at 2,000 tonnes per year with expansion plans to exceed 5,000 tonnes. Neo’s magnets are tailored to the high heat and performance demands of EV traction motors and are also being expanded to serve industrial, power tool, and offshore wind markets.
CEO Rahim Suleman highlighted the speed and focus of the European ramp-up: “Built in just 500 days, this magnet plant is a platform for serious growth—and the market is responding.” Neo has decades of experience in rare earth magnetic materials and was a pioneer in commercializing heavy-rare-earth-free magnets in new energy vehicle (NEV) applications.
What This Means for Investors
Neo’s Estonia win highlights a deeper strategic trend: OEMs and Tier 1 suppliers are actively diversifying magnet sourcing outside of China. With Europe’s EV industrial base growing, a regional supplier like Neo—especially one already producing at commercial scale—is well-positioned for repeat awards. But key questions remain:
- Who are the unnamed Tier 1 and OEM customers, and will their volume scale further in Phase 2?
- Can Neo maintain material pricing and margin as NdFeB demand grows amid market volatility?
- How will Neo’s cost structure compare to dominant Chinese magnet producers over time?
For now, the Narva facility is a rare proof point that Europe’s magnet reshoring ambitions are finally moving from policy to production.
Profile
Neo Performance Materials Inc. is a Canadian-based advanced materials company specializing in the production of rare earth and rare metal-based products that enable technologies critical to the clean energy transition. Headquartered in Toronto, Ontario, Neo traces its origins to 1994 but was officially formed in its current structure following the reorganization of Molycorp in 2015. It integrates legacy operations such as Magnequench, originally founded in 1986, and other specialty materials units. The company is publicly traded on the Toronto Stock Exchange (TSX: NEO) and OTCQX (NOPMF), with a global footprint that includes manufacturing facilities in Canada, China, Germany, Estonia, Thailand, and the United Kingdom, as well as R&D operations in Singapore.
Neo employs approximately 1,700 to 1,800 people worldwide and reported around $475 million in revenue for fiscal year 2024, reflecting a 17% year-over-year decline amid broader market volatility. Despite near-term financial softness, the company holds a strategic position in the rare earth supply chain. It operates across three core segments: Magnequench (producing rare earth magnetic powders and bonded magnets), Chemicals & Oxides (including environmental catalysts and rare earth separations), and Rare Metals (focusing on high-value elements like niobium, tantalum, and hafnium).
Neo is best known for being one of the only producers of sintered rare earth magnets outside Asia, with its new Narva, Estonia facility standing as a cornerstone in Europe’s bid to build a secure, localized magnet supply chain. The company supplies advanced materials used in electric vehicles, wind turbines, energy-efficient appliances, industrial motors, water purification, aerospace, and medical imaging. Neo’s business model focuses on value-added transformation of rare earths into application-specific solutions, placing it at the nexus of geopolitical, clean energy, and technological trends. With growing policy support for non-China rare earth supply chains and increased electrification demand, Neo is well-positioned as a mid-sized but globally relevant player in the critical minerals ecosystem.
Source: Neo Performance Materials, “Neo Wins Another Traction Motor Award with an Additional Tier 1 and OEM Customer in Europe,” July 9, 2025
www.neomaterials.com (opens in a new tab) | TSX: NEO | OTCQX: NOPMF
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