Neo announces operational transformation at Estonia rare metals facility
Change will not impact Neo's current rare earth production operations in Estonia.
December 19, 2023 | By MRO Magazine
TORONTO — Neo Performance Materials Inc. provides an update on its manufacturing strategy execution with respect to Rare Metals operations at the NPM Silmet OÜ plant in Sillamäe, Estonia (NPM Silmet). This shift in focus away from midstream toward downstream operations is expected to diversify feedstock supply, reduce working capital requirements, and reduce volatility by lowering inventory volumes and holding times.
Beginning this week, NPM Silmet is updating its manufacturing processing of Niobium and Tantalum to improve business performance of its rare metals production. NPM Silmet will shift further downstream in its value-add operation, by halting the energy-intensive hydrometallurgical processing of Niobium- and Tantalum-bearing ores.
Going forward, future products will be derived from oxides and recycled materials. Neo has completed testing of these purchased oxides and has entered into numerous sourcing agreements for these input materials.
It is anticipated that the Rare Metals unit’s operational transformation will result in streamlined business processes. In connection with this production re-alignment, Neo anticipates taking a charge to its fourth quarter net income/(loss), including approximately US$2 to $3 million non-cash charge for impairment of assets and less than US$1.5 million of employee restructuring costs. In addition, savings from working capital reductions are expected to offset the restructuring and transition cash costs in less than a year with operating income improvements delivered on an ongoing basis.
“We are continuing to execute on our new manufacturing strategy to improve the return on capital employed, reduce dependency on concentrated supply arrangements, and better control volatility in earnings,” said Rahim Suleman, President and CEO of Neo.