0
A panoramic view of LS Eco Energy's production subsidiary in Vietnam (LSCV). / LS Eco Energy

LS Eco Energy is building a production facility in Vietnam for samarium metal, a rare earth element used in the defense industry. The plan aims to secure a non-China supply chain extending from raw materials to metals and permanent magnets ahead of tighter U.S. supply chain regulations on Chinese rare earths.

According to LS Eco Energy on the 30th, the company is investing 11.6 billion won to establish a samarium metal production facility with an annual capacity of approximately 240 tons at its LSCV site in Ho Chi Minh City, Vietnam. Trial mass production is scheduled to begin in December, with the company describing the site as the first defense-grade samarium production base outside of China.

Samarium is a core raw material for samarium-cobalt (SmCo) permanent magnets, which stably maintain magnetic force even at high temperatures. SmCo permanent magnets are primarily used in aerospace and defense applications that require high heat resistance and stability, such as fighter jets and missiles.

The samarium produced at this facility is enough to manufacture roughly 700 to 1,000 tons of SmCo permanent magnets annually. The company explained that securing non-Chinese raw materials is growing increasingly important, particularly as the U.S. is set to expand its supply chain regulations to the raw material level starting in January 2027 for SmCo permanent magnets procured by the Department of Defense.

This investment marks the first commercial production project resulting from the collaboration between LS Eco Energy and Australian rare earth company Lynas. The two companies strengthened their cooperative partnership in July by mutually acquiring 30 billion won worth of convertible bonds (CBs) from each other.

The supply chain framework involves Lynas providing the raw rare earth materials, LS Eco Energy processing them into metals in Vietnam, and then supplying them to LS Cable & System's permanent magnet plant. Through this setup, the initiative envisions building a supply network that reduces reliance on China, from raw material procurement to the production of rare earth metals and permanent magnets.

Beginning with samarium, LS Eco Energy plans to expand its rare earth metal production portfolio to include dysprosium (Dy), terbium (Tb), and neodymium-praseodymium (NdPr). Lee Sang-ho, CEO of LS Eco Energy, stated, "We expect South Korea, despite lacking domestic rare earth resources, to emerge as a core axis in the global supply chain by manufacturing high-value-added materials and components."

                                                                                                         Son Kang-hoon