Neo Heavy Rare Earth Separation Advances Europe’s Magnet Supply Chain

Neo Performance Materials

Neo heavy rare earth separation has reached a key milestone after Canada-based Neo Performance Materials produced its first separated terbium and dysprosium process solutions at its Silmet facility in Estonia. These solutions are precursors to terbium and dysprosium metal, both of which are essential for high-performance permanent magnets.

Neo heavy rare earth separation is strategically important because all processing for the new line is completed within Europe. This gives the region a rare ex-China pathway for heavy rare earth separation at a time when supply pressure remains high.

Neo heavy rare earth separation also supports the company’s broader plan to build a vertically integrated rare earth magnetics value chain in Europe. The company is advancing its European permanent magnet facility in Estonia and aims to reach commercial production in 2026.

Silmet Facility Adds Heavy Rare Earth Separation Capacity

Neo has commissioned a small-scale heavy rare earth solvent extraction production line at its Silmet facility. The line produced terbium and dysprosium process solutions from mixed heavy rare earth carbonate feedstock.

The line is now operating at nameplate capacity and can reach maximum throughput. Neo is now focused on achieving stable product purity before moving into routine production.

This step matters because separation is one of the most difficult and strategically sensitive parts of the rare earth value chain. Mining or carbonate feedstock alone does not create supply security unless it can be separated, refined and converted into metals and magnets.

Terbium and dysprosium improve magnet performance under high-temperature operating conditions. That makes them critical for electric vehicles, wind turbines, robotics, industrial motors and other advanced manufacturing applications.

Export Controls Increase Pressure for Ex-China Supply

Terbium and dysprosium remain primarily produced in China. Both materials have been subject to Chinese export controls since 4 April 2025, tightening availability outside China and raising pressure on downstream users.

Supply outside China has fallen sharply since the controls were implemented. This has supported high dysprosium and terbium prices and increased urgency among western governments and manufacturers to build alternative supply chains.

Neo’s Estonia operation directly addresses this gap. By adding heavy rare earth separation inside Europe, the company strengthens regional capacity for magnet materials that support clean energy, defense, automation and advanced industrial systems.

The project also complements Neo’s planned permanent magnet facility in Estonia. If separation, metal conversion and magnet production can be aligned, Europe could reduce dependence on imported heavy rare earth inputs and strengthen industrial resilience.

The Metalnomist Commentary

Neo’s Estonia milestone shows that Europe’s rare earth strategy is moving from policy ambition into industrial execution. The next challenge is scaling purity, throughput and magnet production fast enough to meet demand from EVs, wind power and defense supply chains.