LS Eco Energy plans first defense rare-earth plant outside China

South Korea’s LS Eco Energy plans to establish the first production base outside China for defense-grade rare-earth metals as it moves to strengthen alternative supply chains for aerospace and weapons manufacturers.

The company said Wednesday it will invest 11.6 billion won ($8.6 million) to build a samarium metal production facility in Vietnam.

Samarium is a key raw material for samarium-cobalt, or SmCo, permanent magnets, which retain stable magnetic properties even at high temperatures.

SmCo magnets are widely used in aerospace and defense equipment, including fighter jets and missiles, where strong heat resistance and stability are essential.

LS Eco Energy will build the facility at the site of its Vietnamese production subsidiary LSCV in Ho Chi Minh City. The plant will have an annual production capacity of about 240 metric tons of samarium metal and is scheduled to begin pilot production in December.

That volume would be sufficient to produce about 700 to 1,000 metric tons of SmCo permanent magnets a year.

The investment marks the first commercialization project resulting from the partnership between LS Eco Energy and Australia’s Lynas Rare Earths.

The two companies strengthened their partnership in July by each subscribing to 30 billion won in convertible bonds issued by the other.

Lynas is the world’s only significant producer of separated light and heavy rare earths outside China.

LS Eco Energy plans to expand its rare-earth metal portfolio to include dysprosium, terbium and neodymium-praseodymium.

“Although Korea lacks rare-earth resources, we expect it to become a key pillar of the global supply chain through the production of high-value materials and components,” LS Eco Energy CEO Lee Sang-ho said.