Canadian group Neo Performance Materials started production at Europe’s first mass-scale production facility for rare-earth magnets on Friday. The $75 million plant opened as the company’s CEO predicted a three-fold increase in demand over the next decade, and Chinese customs data showed exports of rare-earth magnets to the EU rising 21% to 2,582 tons in August compared to a month earlier.
China’s positioning in the rare-earths supply chain—whereby it controls 60% of the world’s rare-earth resources and 90% of the refining capabilities, and is now tightly controlling exports in retaliation to US tariffs—is proving a successful strategy, for now. But the fact that rare-earths and rare-earth magnets are integral to most modern technologies, means that the current China policy is in effect forcing the world to fast-track the development of alternative sources.
The new factory in Estonia, while it can only produce 2,000 tons per year of Europe’s current 22,000 ton demand, could well be the first of many examples of countries pushing back and diversifying away from the risk of Chinese supply control.