Alternative to China: New Supply Chains for Rare Earth Magnets

by | 13. Mar 2024 - 10:37 | Economy

South Korean Posco Group to supply car manufacturers in North America and Europe. Raw materials are to come from the U.S., Australia, and Vietnam.

Posco International, the trading and energy division of South Korean steel giant Posco, will supply car manufacturers in North America and Europe with permanent magnets made from rare earths. Corresponding contracts worth around $885 million have been signed via Posco’s subsidiaries in the U.S. and Germany, as reported by The Korea Herald, among others. According to the Group, the rare earths used to produce the permanent magnets will come from the United States, Australia, and Vietnam. All three countries want to establish themselves as raw material alternatives to the quasi-monopolist China, although Vietnam’s rare earth industry is still in its infancy. The People’s Republic dominates the extraction of critical minerals and their further processing into permanent magnets.

Posco did not name the customers; the delivery period in the USA is expected to be from 2026 to 2031 and Europe from 2025 to 2034. The Star Group, Korea’s only manufacturer of these high-tech components, will produce the permanent magnets. Last fall, plans were announced to build a magnet factory in the U.S. together with Posco.

Other South Korean industry and government representatives are also developing new supply chains to reduce dependence on Chinese raw material imports and strengthen the domestic industry. For example, Vietnam recently agreed on closer bilateral cooperation, including research on rare earths. Just over a month ago, the South Korean company LS Cable & System also announced a joint venture with Vacuumschmelze, Europe’s leading producer of permanent magnets.

Photo: iStock/Michael Ien Cohen

Starting Soon: Rawmaterials Newsletter

Subscribe now and stay up to date!

Subscribe Now!
Stay up to date with our brand new newsletter.
By subscribing, you agree that the data you enter will be transmitted to our e-mail tool rapidmail.