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Estonia celebrates groundbreaking for a revolutionary magnet plant in Narva

Construction starts on a new €100M magnet plant in Narva, Ida-Viru county, with an aim to boost European energy security, create jobs and transform the region.

On June 28th, the Estonian city of Narva, in Ida-Viru county, celebrated a very special occasion. Canadian company Neo Performance Materials (NPM) held a ground-breaking ceremony for its state-of-the-art magnet plant, designed to open a new chapter in European energy security and strategic autonomy.

Gathering investors, local authorities and other notable guests for its opening, the €100M investment project was also endorsed by Estonian president Alar Karis and EU Commission president Ursula Von Der Lyuen.

Boosting Europe and the local economy

The new magnet factory is being built with the aim of supplying 50 per cent of the European Union’s magnet needs by 2026. This ambitious project, backed by an initial investment of over €100 million, will not only boost the local economy but also create over 300 jobs initially with later expansion to over a 1000 positions. The factory will cover an impressive area of over 29 000 upon its completion and will meet all the green standards.


The European Just Transition Fund (JTF) is providing support in the form of €19 million to facilitate the construction. NPM’s new factory is the first-ever receiver of JTF, which clearly shows Estonian agility and readiness to take the lead in the green transition. The grant money from the Fair Transition Fund is specifically intended to support businesses in Ida-Viru, which relied on the oil shale industry. This financial assistance aims to facilitate a smooth transition to more sustainable practices.

“There’s a global competition for ways of living. We in Estonia think that societies should be open, democratic and built upon a free economy. That’s why we need to secure critical production, and Estonia shows that we can act fast in this regard,” said Tiit Riisalo, Minister of Economic Affairs and Information Technology.

Tiit Riisalo

Asian companies currently dominate magnet production. However, Europe recognizes the importance of having its own production capabilities and has recently passed legislation to prove it. The recently adopted Critical Raw Materials Act aims to ensure the EU’s access to a secure and sustainable supply of critical raw materials, enabling Europe to meet its 2030 goals for green and digital technologies, defence, and space applications. The act lists 34 critical metals and minerals that the EU aims to mine, process, and recycle to make the region more self-reliant and shield it from the impact of increasing international competition for these resources.

Europe at its best

“Managers at Neo Performance Materials informed me that, with their worldwide experience, they had never seen such a fast issuance of permits as for this facility. This is Europe at its best”, said Ursula von der Leyen in her video remarks. She stressed that this rare earth refinery would be essential to boost electric mobility, wind energy, and microelectronics across Europe. Narva and Ida-Virumaa, which have a long-standing industrial tradition, are perfect places to explore those opportunities.

 Audience looking at Ursula von der Leyen’s speech 

“Estonia is a crucial part of that story and, with the upcoming plant coming together, one of the most important jurisdictions in the Western World for magnet production”, said Constantine Karayannopoulos, CEO of New Performance Materials. For him, this project, which will be the last grand opening before retirement from the executive position, proved the attractiveness of Estonia specifically for future investments, he revealed.

The construction of the Narva magnet facility marks the beginning of Europe’s response to the need to electrify its transportation and other industries rapidly. And it’s going to be done fast, as the company has already enjoyed the record pace of obtaining all the necessary permits and broad support. “Working closely with the Estonian Investment agency and other parties involved in this project was a truly wonderful experience”, said Doctor Greg Heydon, who will be leading the construction process over the next years.

 Groundbreaking ceremony with NPM executives, investors, local and state authorities

Invest Estonia’s director, Joonas Vanto, also views this initiative as having far-reaching implications. The construction of the plant is not only critical for Europe but also for the rest of the world. It will establish an extensive network that connects the entire value chain, he stressed in his speech.

The first phase of the Narva magnet plant is expected to be operational by early 2025, providing employment opportunities for over 300 individuals. Initially, the plant will have a production capacity of 2,000 tons of magnetic blocks per year. However, there is room for expansion, and the facility could potentially produce over 5,000 tonnes annually in the future. Should this expansion occur, the investment in the plant could reach approximately €250 million, supporting the employment of around 1,000 people.

Interested in investing in Estonia? Find out more about the country’s energy sector here and book a time via e-Consulting to speak to your personal advisor.

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