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Officials pose for a commemorative photo after the signing of an investment memorandum of understanding between North Gyeongsang Province, Korea Motion Works and the city of Gumi on Oct. 29. / Courtesy of LS Cable & System

LS Cable & System will invest 350 billion won to establish Korea's largest rare-earth permanent magnet production base in Gumi, North Gyeongsang Province. The move is aimed at diversifying the rare-earth supply chain, which is heavily dependent on China, and securing a stable supply of critical materials for advanced industries such as robotics, electric vehicles and defense. The company is also accelerating efforts to build a supply chain outside China by sourcing rare-earth raw materials from Australia, producing metals in Vietnam and manufacturing permanent magnets in Korea and the United States.

LS Cable & System announced on Oct. 30 that its rare-earth permanent magnet subsidiary, Korea Motion Works, had signed a memorandum of understanding (MOU) with North Gyeongsang Province and the city of Gumi on Oct. 29 to build a production facility worth approximately 350 billion won.

Korea Motion Works plans to begin construction of the plant in the first half of 2027 and start mass production of neodymium-iron-boron (NdFeB) permanent magnets for robots and electric vehicles in the second half of 2028. It will subsequently expand production to include samarium-cobalt (SmCo) permanent magnets for defense applications.

The plant is expected to have an annual production capacity of more than 1,000 tons, equivalent to approximately 17% of Korea's domestic demand for rare-earth permanent magnets, estimated at around 6,000 tons. If the facility begins operating as planned, it is expected to expand the domestic supply base for permanent magnets used in advanced industries.

Rare-earth permanent magnets are essential materials used in electric vehicle motors and industrial robots. Neodymium magnets, in particular, provide strong magnetic force, allowing motors to be made smaller and more energy-efficient. Samarium-cobalt magnets retain their magnetic properties even at high temperatures, making them suitable for specialized industries such as defense.

The central objective of the investment is to establish a supply chain outside China, covering everything from raw materials to finished products.

LS Cable & System plans to link rare-earth raw material supplies from Australia's Lynas with rare-earth metal production by LS Eco Energy in Vietnam and permanent magnet manufacturing in Korea and the United States. The strategy is designed to reduce reliance on the existing China-centered supply chain and provide global customers with a stable supply system.

The Gumi plant will serve as a key production hub within this supply chain. LS Cable & System expects strong synergies between the permanent magnet facility and related industries, as Gumi has been designated a specialized complex for national advanced strategic industries in the robotics sector. The company's existing manufacturing capabilities in Gumi and the region's industrial infrastructure were also factored into the investment decision.

Through the investment, LS Cable & System aims to expand into the robotics, defense and electric vehicle markets while improving the stability of domestic supplies of critical materials.

                                                                                                            Lee Seo-yeon