POSCO International to build rare earth supply chain

POSCO International headquarters in Incheon / Courtesy of POSCO International

POSCO International, the trading arm of POSCO Holdings, said Monday it will build a global supply chain for heavy rare earth elements to strengthen its presence in the electric vehicle (EV) components sector.

The company said it has established 25 billion won ($16 million) in a corporate venture capital (CVC) fund with POSCO Investment and will invest an initial 8 billion won in a domestic rare earth refining company.

The investment is aimed at securing a stable supply of heavy rare earth materials, including dysprosium and terbium, which are essential for high-performance permanent magnets used in EV motors, the company said in a press release.

Production and refining of these materials remain concentrated in a limited number of countries, posing structural risks to global supply chains.

In addition to the domestic investment, POSCO International plans to strengthen its global sourcing network with a focus on Southeast Asia. It will launch a $30 million joint project with a Malaysian partner for rare earth refining and participate in a separate refining project in Laos to expand its regional supply base.

These investments are expected to secure about 4,500 tons of refined rare earth materials annually from Southeast Asia, the company said, adding it plans further investment to increase annual capacity to more than 10,000 tons.

Leveraging these resources, the company will partner with U.S.-based minerals company ReElement Technologies to build a rare earth refining plant in the United States with an annual capacity of 3,000 tons, with production set to begin in 2027.

It also plans to establish a facility capable of producing 3,000 tons of permanent magnets annually in the United States by 2028.

Last year, POSCO Holdings invested a total of 1.1 trillion won to secure additional stakes in lithium mines in Australia and a lithium brine project in Argentina.