POSCO International, the trading division of POSCO Holdings, announced Monday that it will establish a global supply chain for heavy rare earth elements to enhance its foothold in the electric vehicle (EV) components market.
The firm announced it has set up a 25 billion won ($16 million) corporate venture capital (CVC) fund in collaboration with POSCO Investment and will initially invest 8 billion won in a local rare earth refining business.
The investment targets ensuring a steady supply of heavy rare earth elements, such as dysprosium and terbium, crucial for high-performance permanent magnets utilized in electric vehicle motors, as stated by the company.
The manufacturing and processing of these resources continue to be dominated by a small group of countries, creating systemic risks for worldwide supply chains.
Besides domestic investments, POSCO International aims to enhance its global sourcing network, concentrating on Southeast Asia. It will initiate a $30 million collaborative project with a Malaysian partner for rare earth refining and take part in another refining initiative in Laos to broaden its regional supply network.
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The company stated that these investments are anticipated to secure approximately 4,500 tons of refined rare earth materials each year from Southeast Asia, and it intends to invest more to raise its annual capacity to over 10,000 tons.
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By utilizing these resources, the firm will collaborate with the U.S. minerals company ReElement Technologies to construct a rare earth refining facility in the United States that will have an annual output of 3,000 tons, with operations expected to commence in 2027.
It aims to create a facility able to manufacture 3,000 tons of permanent magnets each year in the United States by 2028.
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In the previous year, POSCO Holdings allocated a total of 1.1 trillion won to obtain further shares in lithium mines located in Australia and a lithium brine initiative in Argentina.