Seoul: POSCO International Corp., the trading arm of POSCO Holdings, announced plans to develop a global supply chain for heavy rare earth elements to enhance its role in the electric vehicle (EV) components industry.
According to Yonhap News Agency, the company has set up a corporate venture capital (CVC) fund worth 25 billion won (approximately US$16 million) in collaboration with POSCO Investment. An initial investment of 8 billion won will be directed towards a domestic rare earth refining enterprise. This move aims to secure a reliable supply of vital heavy rare earth materials, such as dysprosium and terbium, which are critical for manufacturing high-performance permanent magnets used in EV motors.
The production and refining of these materials are predominantly concentrated in a few countries, which creates inherent risks for global supply chains. To mitigate these risks, POSCO International plans to enhance its global sourcing network, particularly in Southeast Asia. The company will initiate a $30 million joint project with a Malaysian partner for rare earth refining and will also take part in a separate refining project in Laos to bolster its regional supply foundation.
These strategic investments are projected to secure approximately 4,500 tons of refined rare earth materials annually from Southeast Asia. POSCO International also aims to further invest in order to increase this annual capacity to over 10,000 tons. By capitalizing on these resources, the company intends to collaborate with U.S.-based ReElement Technologies to construct a rare earth refining plant in the United States with a yearly production capacity of 3,000 tons, expected to commence operations in 2027.
In addition, the company is planning to set up a facility in the United States capable of producing 3,000 tons of permanent magnets annually by 2028. Last year, POSCO Holdings invested a total of 1.1 trillion won to acquire additional shares in lithium mines in Australia and a lithium brine project in Argentina.