POSCO International Corp. has signed a memorandum of understanding (MOU) with ReElement Technologies LLC to cooperate on building an integrated rare earth and permanent magnet production complex in the US, ReElement said on Thursday.
The planned industrial complex would be the first facility in the US to achieve full vertical integration of rare earth and permanent magnet production. The materials are essential for electric vehicles and hybrid cars.
“By securing a more stable supply of rare earth raw materials and strengthening permanent magnet production capabilities, the initiative will enable long-term, stable and flexible delivery of critical materials to automakers worldwide,” said ReElement said in a press release.
ReElement is a US rare earth refining company under American Resources Corp., a Nasdaq-listed critical mineral supplier.
Under the partnership, POSCO International will oversee sourcing of rare earth intermediate materials and the permanent magnet business, while ReElement will provide advanced separation, refining and recycling technology.
POLICY SUPORT
The facility will be designed to manage the entire value chain from securing rare earth raw materials and conducting separation and refining to manufacturing permanent magnets and recycling manufacturing scrap and end-of-life magnets.
“The governments of South Korea and the US also discussed potential policy, financial, and regulatory support should the project move into full-scale implementation,” ReElement added.
The MOU follows POSCO International’s 2023 contract with a major North American automaker to supply approximately 7,700 tons of permanent magnets, enough for about 3.85 million EV motors, between 2026 and 2031.
POSCO has also signed an agreement with a premium European automaker to supply roughly 800 tons, sufficient for about 400,000 EV motors, from 2025 through 2034.
The orders are worth a combined 1.2 trillion won ($9 billion). POSCO and ReElement did not identify the two automakers.
“Building on this cooperation, POSCO International plans to broaden its value chain to solidify its position as a key supplier of electric vehicle drive train components,” ReElement said in the press release.
“Future plans include offering complete packages of all parts required for drive motor core rotors and stators to automakers domestically and internationally.”
Permanent magnets, containing rare earth materials, are essential for motor cores to function effectively and their quality plays a critical role in determining an EV’s efficiency.
“By combining our patented refining technology with POSCO’s industrial capabilities, we are scaling rare earth processing and strengthening the US-Korea partnership to build resilient and sustainable supply chains for critical materials,” Mark Jensen, CEO of ReElement Technologies.
In January 2024, POSCO International announced a plan to build two more plants for drive motor cores: one in Mexico and another in Poland. It has one each in South Korea, China and India.
By Yeonhee Kim
yhkim@hankyung.com
Jennifer Nicholson-Breen edited this article.
