From Bloomberg, September 18/19:
Executives from Europe’s electric-vehicle industry are trekking to the continent’s sparsely populated northeastern parts to queue for something they struggle to find outside of China: rare-earths magnets that are essential components in EVs.
In Narva, an Estonian industrial town that sits across the river from Russia, Canadian company Neo Performance Materials has built a $75 million magnets plant that opened on Friday. Neo’s initial output will supply components for as many as 1 million cars annually.
“Rare earths are on the top of every government’s list of critical materials,” Neo Chief Executive Officer Rahim Suleman said at the ribbon-cutting, which was also attended by Estonian Prime Minister Kristen Michal and representatives from General Motors Co. and parts suppliers Robert Bosch GmbH, Schaeffler AG and Mahle GmbH, among others.
Bosch, the world’s biggest automotive supplier, has reserved a “significant” share of the plant’s annual magnet production, Neo said in a statement on Friday after signing a multi-year memorandum of understanding with the German firm.
The plant in Estonia is offering a chance to lock in supply chains at a time of global trade tensions, including over rare earths with China. Europe and the world’s vulnerabilities were exposed earlier this year when Beijing in April heavily restricted the export of some of its rare earths in retaliation against US President Donald Trump’s decision to hike tariffs on Chinese goods.
Read More: EU Firms Face New Production Halts on China Rare Earth Delays
European Union companies incurred seven production stoppages in August because of shortages in rare earths, and an additional 46 are expected this month, the EU Chamber of Commerce in China said Thursday, without specifying the scale or nature of the affected facilities.
Neo’s Estonian plant manufactures neodymium magnets, one of the products restricted by China. The magnets convert the electricity stored in a battery into motion, helping rotate the wheels of EVs. They are also used widely from smartphones to wind turbines and fighter jets.
A shortage of rare earth magnet supplies earlier this year forced Ford Motor Co. to idle production of its Explorer sport utility vehicle in Chicago for a week.
Neo — which is also active in chemicals and metals and has 10 manufacturing plants globally, including in the United States and China — made the decision to build the new factory in Estonia in late 2022, months after Russia’s full-scale invasion of Ukraine disrupted Europe’s economy. Neo managed to complete its site on time and within budget, Suleman said.
“With the exception of Neo there is no EV traction motor magnet manufacturing capacity in the West,” Marvin Wolff, an analyst at Paradigm Capital, said in an Aug. 12 report.
The plant will initially produce 2,000 tons of magnets per year, about a tenth of the demand in Europe. The factory will source its own raw materials from Australia....
....MUCH MORE
Related, July 2:
"Rare earth magnet users jolted into paying premium prices for ex-China supply"
From Reuters, July 1:
LONDON/SEOUL, July 1 (Reuters) - For years, Rahim Suleman had reached out repeatedly to automakers and other potential clients to market the rare earth magnets from the plant his company was building in Estonia, one of just a handful outside dominant producer China.
But after April 4, when Beijing imposed new restrictions on the super-strong magnets used in electric vehicles and wind turbines, Suleman retired his sales pitch. He didn't need it any more.
Ever since China's export controls tightened some rare earth exports to a trickle in the midst of a trade war with the U.S., causing chaos in supply chains and some auto plant shutdowns, "the phone is ringing off the hook", said Suleman.Companies starting new plants in Europe, the U.S. and Asia had previously reported difficult talks on deals that embedded the higher costs to make magnets outside China, which benefits from cheaper labour costs and economies of scale as well as government support via tax refunds.
But the crisis has led many customers to soften or drop objections about paying those premiums as they scramble to hammer out deals, according to a dozen industry participants including automakers, magnet makers, rare earth producers, consultants and government officials interviewed by Reuters.While rare earths magnets from China are beginning to flow again, customers remain on edge about the threat of future shortages....
One of the companies mentioned, Neo Performance Materials was also seen in October 2024's "Pssst: Dysprosium" and a few times after Molycorp (MP Materials after the bankruptcy) aquired NEO.to:
Molycorp Looks Set to Open at New All-time Low (MCP)"It began as a twisted dream..."
Nah, it was a Goldman deal.*
