Neo selected for up to €126 million in EU funding for Estonian magnet project

Canadian industrial materials group Neo Performance Materials has been selected for up to €126 million in EU Innovation Fund support for a major expansion of its rare earth processing and permanent magnet operations in Estonia.

The company estimates the total investment in Project GAUSS at approximately €400 million. The project would link rare earth separation, metal production and magnet manufacturing, adding up to 3,000 tonnes of annual magnet capacity. Neo’s existing magnet plant would increase its planned production capacity from 2,000 to around 5,000 tonnes per year.

The investment also includes the modernisation of Neo’s Silmet rare earth separation facility in Sillamäe, which received EU Strategic Project status earlier in October. The expanded operations would supply European industries, including electric vehicle manufacturing, offshore wind energy and industrial automation.

Neo CEO Rahim Suleman said the EU’s selection supports the company’s ambition to develop an integrated European supply chain, from rare earth processing to finished magnets.

The funding selection marks a further step towards the planned investment, but construction and financing are not yet fully committed. Neo must still complete the grant agreement process and make its final investment decisions. The grant agreement is scheduled for signature by 23 March 2027, with project completion expected to take two to three years.