HREE separation Europe reached a commercial milestone on 10 April 2026 when Neo Performance Materials (TSX: NEO; OTCQX: NOPMF) announced the commissioning of a solvent extraction line at the Silmet facility in Sillamäe, Estonia — producing separated terbium and dysprosium from mixed rare earth carbonate feedstock, with all processing completed within Europe.
The line is operating at nameplate capacity. Initial efforts are focused on achieving stable product purity before transitioning to routine production. According to the company’s official 10 April announcement, the Silmet operation validates the technical robustness and operational reliability of HREE solvent extraction under continuous automated conditions.
Why HREE Separation in Europe Changes the Supply Equation
Prior to this commissioning, Europe had no domestic capacity to separate heavy rare earth elements. Every tonne of terbium and dysprosium used in European magnet manufacturing was sourced from Chinese processors. The Silmet line is the first industrial system in Europe capable of separating these elements at commercial scale, providing a traceable, EU-processed alternative for manufacturers operating under Critical Raw Materials Act compliance requirements or customer ESG obligations.
Terbium and dysprosium are added to neodymium-iron-boron (NdFeB) magnets to maintain coercivity at elevated operating temperatures — the property that prevents demagnetisation in EV traction motors and wind turbine generators under sustained thermal load. Without these additions, magnet performance degrades significantly in high-temperature applications. Both elements are produced almost exclusively in China’s southern ionic clay deposits, with no primary mining of either at commercial scale outside China.
According to USGS rare earth statistics, China accounts for the overwhelming majority of global rare earth separation capacity at every stage from carbonate to oxide to metal. The Silmet commissioning does not alter that structural position, but it establishes a working non-Chinese separation node for two of the most supply-constrained elements in the magnet supply chain.
The terbium price rose 20.7% in April 2026 alone to $970.18/kg on the SMM domestic benchmark — the largest single-month gain since 2023. Dysprosium rose 15.6% over the same period to $220.93/kg. Both moves reflect tightening Chinese supply conditions and ongoing export control uncertainty. A locally separated EU source of these materials, even at small scale, carries commercial value beyond the headline volume.
Neo Performance Materials: Estonia Separation-to-Magnet Chain
The Silmet HREE line feeds directly into Neo’s downstream position in Estonia. The company’s sintered NdFeB magnet facility in Narva — formally inaugurated in September 2025 and targeting initial capacity of 2,000 metric tonnes per year — shipped its one-millionth magnet in February 2026 and is advancing through customer qualification programmes ahead of a commercial production ramp expected later in 2026.
Bosch and Schaeffler are among the confirmed offtake partners for the Narva facility. Both are tier-1 automotive suppliers with European EV motor programmes requiring magnets with dysprosium and terbium additions. Localised HREE supply from Silmet reduces the supply chain exposure those customers carry under existing Chinese-sourced alternatives.
The two Estonia facilities together form a separation-to-magnet chain that does not currently exist elsewhere in Europe: heavy rare earth oxide solutions separated at Silmet, feeding sintered magnets manufactured at Narva. Phase 1b of the Narva expansion — targeting 5,000 metric tonnes per year — is in advanced engineering planning, according to Neo’s Q1 2026 results.
Rahim Suleman, President and CEO, said the Silmet commissioning “represents a critical step in Neo’s strategy to build the most vertically integrated rare earth magnetics value chain in Europe,” adding that the company’s processing chain now spans both light and heavy rare earth separation across its Estonian operations.
For a full overview of Neo’s operations, financials, and strategic position, see the Neo Performance Materials company profile.
HREE Separation in Europe: Policy and Strategic Context
The Silmet commissioning lands at a point of heightened European policy focus on rare earth supply chain independence. The EU Critical Raw Materials Act targets 40% of annual rare earth consumption processed domestically by 2030. Neo’s Estonia operations — part-funded by the EU Just Transition Fund, which contributed €18.7 million to the Narva magnet facility — represent the most advanced vertically integrated rare earth processing and magnet manufacturing position currently operating within the EU.
For context on the separation technologies involved at facilities like Silmet, see Top 10 Rare Earth Separation Technologies. For how Neo’s position compares to other processors operating outside China, see Top 10 Rare Earth Refiners Outside China. For the broader European rare earth landscape, see Europe Rare Earth.
The next operational milestone to watch is Neo’s transition from purity stabilisation to routine production at the Silmet HREE line, and the timing of first commercial deliveries of separated terbium and dysprosium to external customers or its own Narva magnet facility.
This article is for informational purposes only and does not constitute investment advice. Prices are subject to change without notice.
What has Neo Performance Materials commissioned in Estonia?
Neo Performance Materials commissioned a small-scale heavy rare earth element (HREE) solvent extraction separation line at its Silmet facility in Sillamäe, Estonia, announced on 10 April 2026. The line is producing separated terbium and dysprosium process solutions from mixed rare earth carbonate feedstock, with all processing completed within Europe.
Why is the Silmet HREE line significant for European supply chains?
Prior to this commissioning, Europe had no domestic separation capacity for heavy rare earth elements. All terbium and dysprosium used in European magnet manufacturing was sourced from Chinese processors. The Silmet line provides the first EU-traceable, domestically separated source of these elements, which are critical additives in NdFeB magnets used in EV motors and wind turbines.
How does the Silmet separation line connect to Neo’s Narva magnet facility?
The two facilities form a separation-to-magnet chain within Estonia. Silmet separates terbium and dysprosium oxide solutions, which can feed into the sintered NdFeB magnet plant in Narva — Europe’s first large-scale NdFeB magnet facility, targeting initial capacity of 2,000 metric tonnes per year and ramping toward commercial production in 2026.
What are terbium and dysprosium used for in magnets?
Terbium and dysprosium are added to neodymium-iron-boron (NdFeB) magnets to maintain coercivity — resistance to demagnetisation — at elevated operating temperatures. This property is essential for EV traction motors and wind turbine generators, where magnets operate under sustained thermal stress. Without these additions, magnet performance degrades significantly in high-temperature applications.
What is the current terbium price and how has it moved recently?
The SMM domestic China terbium benchmark reached $970.18/kg in April 2026, a 20.7% increase from $803.96/kg in March 2026 — the largest single-month gain for terbium since 2023. Dysprosium rose 15.6% over the same period to $220.93/kg. Both price moves reflect tightening Chinese supply conditions and export control uncertainty.
