Europe has launched its first rare-earth magnet production facility in Narva, Estonia, marking a critical step toward reducing reliance on China for components vital to clean energy and electric mobility. The Canadian-built plant, supported by the European Union, is expected to supply magnets for over one million electric vehicles and 1,000 offshore wind turbines annually.
Permanent magnets, primarily made with rare earths, are considered essential for high-efficiency motors used in electric cars and renewable energy technologies. At present, China provides around 90% of the EU’s magnet demand.
With an annual capacity of 2,000 metric tonnes, the Narva plant tailors magnet production to the specifications of European automotive manufacturers and wind turbine producers. The facility draws on rare-earth powders imported from Australia, processed alongside other metals to create the permanent magnets.
The €75 million investment includes €14 million from the EU’s Just Transition Fund, designed to help regions most affected by the shift to climate neutrality. Currently employing around 80 people, the plant could eventually support up to 1,000 jobs.
For Narva, long dependent on carbon-intensive oil shale extraction, the factory represents a turning point. “This kind of factory will bring new industrial companies. Of course, it forces us to develop our workforce,” said Narva’s mayor, Katri Raik, who described the investment as a vote of confidence in the city’s future despite its location on the EU’s border with Russia.
Neo Performance Materials, the Canadian company behind the project, also operates a rare-earth separation plant and research facilities in nearby Sillamäe. For engineers such as Zorjana Mural, who once left academia for the oil and gas industry, the project has been transformative: “When I joined the project there was no building, no walls, nothing. Now it’s filled with machines. It’s really exciting to imagine the future.”
