Neo Performance Materials Inc. has entered into a binding term sheet with French rare earth technology company Carester SAS to establish a strategic partnership that secures heavy rare earth oxides for Neo’s European sintered magnet facility.

Under the arrangement, Neo will receive separated dysprosium and terbium oxides from Carester's Caremag recycling and heavy rare earth separation facility currently being built in Lacq, France. In exchange, Neo will send its manufacturing swarf, a byproduct of the sintered magnet manufacturing process, to Carester for recycling, receiving recovered neodymium-praseodymium, dysprosium, and terbium oxides in return.

The partnership also establishes a tolling arrangement where Neo will process Carester’s mixed rare earth carbonate at its Silmet facility in Estonia. Neo will retain the light rare earth output while returning the heavy rare earths to Carester. Silmet operates as one of Europe's few commercial rare earth separation facilities.

Neo expects to launch commercial production at its European sintered magnet facility in the second half of 2026. The company opened its permanent magnet manufacturing facility in Narva, Estonia, in September 2025 to supply rare earth magnets for the energy transition, and later signed a multi-year Memorandum of Understanding with Robert Bosch GmbH to reserve annual magnet production capacity for European applications.

“This partnership with Carester further advances Neo's strategy to build an industry-leading, secure rare earth magnetics supply chain in Europe,” said Rahim Suleman, President and CEO of Neo. “Few companies can match Carester's specialized expertise in heavy rare earth separation and recycling and pairing that strength with our own separation and magnet manufacturing capabilities in Europe gives our customers the kind of secure, diversified supply chain that critical minerals and advanced materials markets increasingly demand.”

“Carester is on track to bring online Caremag, its recycling and heavy rare earth separation facility in Lacq, France, which will represent the largest heavy rare earth separation and magnet recycling capacity in Europe, a pivotal step toward realizing Europe's vision of a circular rare earth magnetics economy,” said Frédéric Carencotte, President of Carester. “Partnering with Neo, whose light rare earth separation expertise and manufacturing footprint are equally well established, ensures our heavy rare earth oxides and recycled materials go straight to work within a secure supply chain.”

This collaboration underscores broader efforts across the European critical minerals sector to establish localized, circular supply chains for permanent magnets and advanced electric vehicle components.

Read the full announcement: Neo Performance Materials Partners with Carester to Advance Its European Rare Earth Supply Chain