From left, Mike Kopf, senior adviser to the U.S. Secretary of Energy; Mark Jensen, CEO of ReElement Technologies; Lee Kye-in, president of Posco International; and Park Chan-ki, commercial attaché at the Korean Embassy in the U.S., pose for a photo at a signing ceremony for the establishment of a rare earth joint venture in Washington, D.C., on Nov. 21. Photo courtesy of Posco International
POSCO International (047050.KS) is moving forward with the construction of a rare earth and permanent magnet production complex in the United States. As competition to secure critical minerals essential for advanced industries such as semiconductors and artificial intelligence (AI) intensifies, the company is accelerating efforts to expand its US business capabilities, which serve as the focal point of de-China supply chains.
POSCO International announced Wednesday that it signed an agreement on Tuesday (local time) in Washington, D.C., with US mineral company ReElement Technologies to establish a joint venture for rare earth separation and refining. The two companies finalized the agreement after coordinating detailed terms following a memorandum of understanding (MOU) signed in September last year.
The two companies plan to jointly invest a total of $200 million (approximately 301.1 billion won) to build a rare earth separation and refining plant in the United States with an annual capacity of 6,000 tons, and to eventually construct an integrated complex that produces permanent magnets as well. POSCO International will lead the management of the joint venture as the majority shareholder, while ReElement will provide core separation and refining technology.
Of the $200 million total investment, $100 million will be used first for plant and equipment construction and initial operating capital, with the remaining $100 million to be used for capacity expansion based on future market demand. The plant aims to begin pilot production in the fourth quarter of 2027 and full-scale mass production in 2028. POSCO International and ReElement have reportedly already formed a joint task force to source rare earth raw materials from local and overseas mines and recycled resources.
The joint venture is expected to become the first vertically integrated production base in the United States, covering everything from rare earth refining to permanent magnet production. Within the production complex, all stages will be operated, including rare earth raw material separation and refining, permanent magnet manufacturing, and recycling of waste and used magnets. Permanent magnets, powerful magnets made from alloys of rare earth elements, are essential materials widely used in advanced industries such as electric vehicles, semiconductors, defense, robotics, and AI data centers.
POSCO International plans to enhance its influence in the US critical minerals supply chain and secure new business momentum through this joint rare earth complex. The company is accelerating its search for future growth drivers by building an EV component value chain that extends from rare earths to permanent magnets and drive motor cores. Once the joint venture is established, the company is also expected to be able to meet local automakers’ demand for permanent magnets.
The United States is rushing to expand its domestic supply chain to reduce dependence on China for critical minerals, creating greater opportunities for Korean companies including POSCO International. China currently accounts for approximately 70% of global rare earth production and more than 90% of the refining and processing sector. As US-China trade tensions intensify, China has been tightening export controls on rare earths and other critical minerals.
POSCO International is strengthening its raw materials and energy partnership with the United States, which is leading the global supply chain restructuring. The day before, POSCO International signed a large-scale MOU with the US state of Alaska covering cooperation in minerals, energy, and infrastructure. The two sides plan to phase in six strategic businesses, including rare earths, sustainable aviation fuel (SAF), methanol, geothermal energy, and energy terminals.
“This joint venture goes beyond simply establishing a refining plant. It is the starting point for building a critical minerals value chain in the United States that runs from raw materials to final materials,” POSCO International CEO Lee Kye-in said. “The combination of both companies’ global supply chain capabilities and innovative separation and refining technology will create significant synergy.”
“By combining ReElement’s separation and refining-centered platform with POSCO International’s global capabilities and industrial scale, we will build an integrated production system that fills the supply chain gap in the market,” ReElement CEO Mark Jensen added. “The two companies will work together to build a stable supply chain that supports national security, clean energy, and next-generation advanced technologies.”