Neo, Carester Forge European Rare Earth Supply Chain Partnership

Neo Performance Materials Inc. has entered into a binding term sheet with French rare earth technology company Carester SAS to strengthen the European rare earth magnet supply chain. The strategic partnership will connect Carester’s upcoming Caremag facility in Lacq, France, with Neo’s rare earth separation and magnet manufacturing operations across Europe.

The agreement is designed to provide Neo with reliable access to separated heavy rare earth materials required for its European sintered magnet production. Caremag, which is being developed as a recycling and heavy rare earth separation facility, is expected to begin operations during the second half of 2026. Once operational, the facility will supply Neo with separated dysprosium and terbium oxides, two critical materials used in high-performance permanent magnets.

The partnership also introduces a closed-loop recycling model for Neo’s magnet manufacturing operations. Neo will send manufacturing swarf, a valuable rare earth-containing byproduct generated during sintered magnet production, to Carester for recycling. Carester will recover key rare earth elements from this material, including neodymium-praseodymium, dysprosium, and terbium. Neo will then receive the recovered oxides for use within its supply chain. This approach is expected to improve material utilization while reducing the loss of valuable rare earth resources.

A third component of the agreement focuses on expanding feedstock availability for European rare earth separation. Under a tolling arrangement, Neo will process Carester’s mixed rare earth carbonate at its Silmet facility in Estonia. Neo will retain the light rare earth output, while the heavy rare earth fraction will be returned to Carester. Silmet is among Europe’s limited number of commercially operating rare earth separation facilities and has established capabilities in light rare earth processing.

The collaboration combines Carester’s expertise in heavy rare earth separation and recycling with Neo’s capabilities in light rare earth separation and magnet manufacturing. According to Neo President and CEO Rahim Suleman, the partnership supports the company’s strategy of developing a secure and diversified European rare earth magnetics supply chain.

Carester President Frédéric Carencotte said Caremag is progressing toward becoming Europe’s largest heavy rare earth separation and magnet recycling facility. The company expects its collaboration with Neo to ensure that recovered materials and heavy rare earth oxides can directly support European manufacturing.

Overall, the agreement represents a significant step toward developing a more integrated and circular rare earth ecosystem in Europe. By linking recycling, separation, and magnet production, the partnership could reduce dependence on external supply sources and improve the availability of strategically important rare earth materials for European manufacturers.

Product & Chemical Commodity Price Impact

The partnership is likely to have a positive long-term impact on dysprosium, terbium, neodymium-praseodymium (NdPr), and related rare earth products by strengthening European supply security and recycling capacity. Increased availability of separated heavy rare earth oxides could reduce supply tightness and limit sharp price spikes, particularly for dysprosium and terbium. However, the immediate price impact may remain limited because Caremag is still progressing toward commercial operations. Higher recycling rates could also improve NdPr availability and reduce dependence on primary feedstock. For chemical commodities tracked by Chemanalyst, prices are therefore expected to remain stable to moderately softer in the longer term, subject to global demand and supply conditions.