In the shifting landscape of global resource security, two major developments this August are drawing the world’s attention: a headline-making gold discovery in China’s Shandong province and the rapid rise of Neo Performance Materials Inc., a Canadian firm making waves in rare earth magnet production. Both stories, while rooted in geology, reveal much about the geopolitics, economics, and industrial ambitions shaping the 21st-century commodities race.
Rahim Suleman, President and CEO of Neo Performance Materials, describes rare earth magnets as “geopolitical fulcrums”—a phrase that resonates in a world where 93% of the world’s magnet production flows from China. According to InvestorNews, Neo, headquartered in Toronto and operating across six countries, specializes in the specialty chemicals, magnetic powders, and alloys that power everything from electric vehicles to wind turbines and smartphones. The company’s business is divided into three units—Magnequench, Chemicals & Oxides, and Rare Metals—reflecting a 30-year legacy of technological cultivation that the West, for a time, allowed to slip away.
That legacy is now paying off. On August 15, 2025, Neo reported a 42% year-over-year surge in adjusted EBITDA to $19 million for the second quarter, prompting the company to raise its 2025 guidance to as much as $68 million. “Our performance provides a strong foundation to execute on our clear strategic path,” Suleman said in the earnings release, highlighting a 31% volume growth at Magnequench. Second-quarter revenue climbed to $114.7 million, with operating income reaching $8.2 million. The Rare Metals segment, buoyed by gallium recycling in North America and heightened hafnium demand due to U.S. tariffs, delivered $10.8 million in adjusted EBITDA. Meanwhile, Chemicals & Oxides more than doubled its profitability after selling legacy Chinese separation assets and ramping up a new emissions-control catalyst line.
At the heart of Neo’s current momentum is its focus on midstream and downstream operations—a strategy that lets the company pass raw-material volatility straight through to customers and concentrate capital on higher-margin processing and magnet fabrication. “We’ve always focused on the midstream and the downstream… We’re profitable today, cash-flow generating today, and we have a fairly small sustaining capex budget,” Suleman told InvestorNews host Jack Lifton. This operational discipline is matched by technological ambition: construction is nearing completion on a permanent-magnet plant in Narva, Estonia, with a grand opening scheduled for September 2025. Next door, a pilot heavy-rare-earth separation line is being built, capable of producing dysprosium and terbium in quantities small by Chinese standards but unprecedented in the West.
Lifton, a veteran observer of rare earth cycles, pressed Suleman on the significance of this achievement: “If what you’re saying is correct… you will be the first company in the history of the western world to have done that.” Suleman replied that while the line is modest, it is “capable of real production, going into magnets and vehicles,” and represents the seed of a full-scale heavy rare earth facility once consistent feedstock emerges. Neo still operates a heavy-earth separator in China—subject to export-control red lines—and complements it with light-earth capacity in Thailand and now Europe. Suleman emphasized that Neo abides by every jurisdiction’s laws and is developing know-how in Europe without violating Chinese technology-transfer restrictions.
This dual-track model, leveraging entrenched Chinese operations while nurturing non-Chinese supply chains, allows Neo’s customers to point to provenance when governments tie incentives and tariffs to on-shore content. Market geography is crucial: “Many people understand the size of the U.S. market, but… Europe is two-and-a-half times bigger than the U.S.,” Suleman noted. Government grants, fast permitting, and eager automotive customers have already validated the Estonian investment, including a new traction-motor magnet award worth an estimated $50 million in cumulative revenue. The company is also eyeing a potential American expansion, though details remain under wraps.
Neo’s numbers suggest plenty of bandwidth for growth on either continent. Since June 2025, Neo has repurchased $2.3 million of stock and declared a quarterly dividend of C$0.10 per share for payment on September 26, 2025. Magnequench shipped 37% more bonded magnets into electric vehicle traction motors and other strategic niches where Chinese competitors often struggle to meet Western traceability audits. Lifton praised the breadth of Neo’s operations: “You have the right-sized operation, in the right market, at the right time.” Suleman, however, stressed the need for a vibrant ecosystem with multiple qualified players, saying, “We’d like to see more capability, more awareness, and customer confidence in the supply chain.”
While Neo’s story is one of Western resurgence, China’s latest gold discovery in the Laizhou-Zhaoyuan belt of Shandong province is a reminder of Beijing’s enduring resource ambitions. As reported in August 2025, this region already dominates China’s gold output, hosting several large deposits, including the Xiling mine. The new find—potentially adding several hundred tonnes of gold reserves—fits squarely within China’s 2023-2027 mineral exploration campaign and the 14th Five-Year Plan’s emphasis on resource security.
Assets in the belt are typically controlled by provincial state-owned enterprises like Shandong Gold and mixed-ownership players such as Zijin Mining, both key vehicles for Beijing’s resource strategy. These state-owned enterprises are under pressure to improve returns, divest non-core holdings, and maintain capital discipline—a response to past cycles of aggressive mergers and overseas forays that yielded mixed results. Today, funding is cheaper onshore, and policy winds favor capital expenditure, but return thresholds are higher and oversight is tighter.
Turning a large deposit into bullion is no easy feat. Shandong’s geology often means deep, hard-rock mining at depths of 1,000 meters or more, with high risks of water inflow and rockburst. Following fatal accidents, including the 2021 Qixia incident, regulators have tightened safety reviews and environmental impact assessments. Environmental regulations now include “ecological red lines” and water-use constraints, while lawmakers are working to modernize mineral resource laws to improve royalties and rehabilitation standards. These changes raise upfront costs and slow schedules but are considered credit positives in the long run.
The People’s Bank of China has spent the past two years diversifying reserves by adding gold, supporting domestic commodities markets and reducing import demand volatility. Yet gold pricing remains more sensitive to U.S. real yields, dollar strength, and geopolitical stress than to incremental Chinese output. Meanwhile, Beijing is encouraging long-term capital inflows into equities, including gold producers and diversified miners, as a way to stabilize markets amid a weak property cycle.
Anti-corruption measures and regulatory scrutiny are also intensifying in the mining sector, particularly around resource approvals and procurement. The Central Commission for Discipline Inspection has warned about rent-seeking in the approvals chain, and a major discovery in a politically connected province like Shandong will draw extra attention. For companies, this means longer paper trails and tighter procurement; for investors, it’s both a governance overhang and a hedge against shortcuts that could later trigger fines or shutdowns.
Both Neo’s advances in rare earth magnets and China’s gold discovery illustrate the complex interplay of industrial policy, market discipline, and regulatory oversight now defining the global commodities race. Whether it’s building a parallel supply chain for critical minerals or shepherding a resource from PowerPoint to production, the real test lies in execution—and in restoring confidence that industrial ambition can still deliver.
