Neo Performance Materials is partnering with French rare earth technology company Carester to secure material for its European magnet operation.

The Toronto-based company said Monday that it entered a binding term sheet with Carester to secure supplies of separated heavy rare earths to support production at Neo's European sintered magnet facility.

The deal will also provide Carester, which is building a recycling and heavy rare earth separation facility in France, with access to Neo's recyclable magnet waste and rare earth separation capacity.

Neo said it will receive separated dysprosium and terbium oxides, providing some of the critical heavy rare earth inputs needed for its European sintered magnet facility that is expected to launch commercial production this year.

In turn, Neo will send its manufacturing waste material to Carester for recycling and will receive the recovered neodymium-praseodymium, dysprosium and terbium oxides.

Under a tolling arrangement, Neo will process Carester's mixed rare earth carbonate at its Silmet facility in Estonia, retaining the light rare earth output while returning the heavy rare earths to Carester.

The partnership is part of Neo's effort to build a secure rare earth magnetics supply chain in Europe.