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Construction of magnet factory in Narva begins

With an initial investment of over €100 million and future employment of over 300 employees, the magnet factory in Narva aims to supply 50 percent of the European Union's magnet requirements by 2026. The European Fund for a Just Transition provides support in the amount of €19 million.

The construction of the Narva magnet facility, which was allocated about €19 million from the €340 million Just Transfer Fund, began on Wednesday.

"Asian enterprises dominate magnet production. Europe's response has been that production should take place in Europe. The European process has began here, in one of Europe's starting points," said Neo's CEO Constantinos Karayannopoulus, whose company is building the plant.

It is essential for Enterprise Estonia (EAS) that the support has the broadest potential impact.

"One thing is that a plant is being constructed that is not only critical for Europe, but for the rest of the world as well. It is the beginning of an extensive network that will link the entire value chain, according to Kaupo Reede, Development Manager of the EAS Applied Research Programme.

The grant money from the Fair Transition Fund is intended to assist businesses in Ida-Viru County, which relies on an oil shale industry with a significant environmental footprint, in transitioning. Due to Russia's full-scale aggression against Ukraine, companies contributing to the green transformation have been unable to make investment decisions.

"There are too many variables for an investor to consider in a single equation, including the energy crisis, inflation and rising interest rates." According to Ivan Sergeyev, coordinator of the East-Viru fair transition process, all of these reasons added to the problem.

"The war made investors nervous for a while, but they know this is EU territory, NATO territory, and they feel safe here. I hope other businesses feel the same way," Sergeyev continued.

The first Narva magnet plant, employing over 300 workers, is slated to open in early 2025.

According to Karayannopoulos, the Narva plant's initial capacity is 2,000 tons of magnetic blocks per year, with the potential to develop to more than 5,000 tonnes per year in the future. "This could bring the total investment to around €250 million, and we may need to expand our employment to around 1,000 people," he continued.


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Editor: Merili Nael, Kristina Kersa

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