POSCO International (047050.KS) will build the first integrated rare earth and permanent magnet production complex in the United States. The move comes as competition intensifies to secure critical minerals essential for advanced industries including semiconductors and artificial intelligence (AI), with the company accelerating efforts to expand its influence in U.S.-led supply chains aimed at reducing dependence on China.
POSCO International recently signed an agreement in Washington, D.C. with local mineral company ReElement Technologies to establish a joint venture for rare earth separation and refining. The two companies reached a final agreement after coordinating detailed terms following a memorandum of understanding (MOU) signed in September last year.
POSCO International and ReElement will jointly invest a total of $200 million (approximately 301.1 billion won) to build a new rare earth separation and refining plant in the United States with an annual capacity of 6,000 tons. POSCO International, as the majority shareholder, will lead the management of the joint venture, while ReElement will provide core separation and refining technology. The two companies have also formed a joint task force (TF) to ensure stable sourcing of rare earth raw materials from local and overseas mines as well as recycled resources.
Of the total project cost, $100 million will be initially invested in plant and equipment construction and early operating funds. The remaining $100 million will be used for future expansion based on market demand. The first phase will establish an annual production capacity of 3,000 tons, which will be expanded to 6,000 tons through a second-phase expansion. The rare earth plant aims to begin pilot production in the fourth quarter of next year and start mass production in 2028.
The joint venture is expected to become the first integrated production hub in the United States, vertically integrating the entire process from rare earth raw material separation and refining to permanent magnet manufacturing and the recycling of waste and used magnets. Permanent magnets, high-performance magnets made from rare earth element alloys, are widely used across advanced industries including electric vehicles, semiconductors, defense, robotics, and AI data centers.
From left, Mike Kopp, 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 to establish a rare earth joint venture in Washington, D.C., on Nov. 21. Photo courtesy of POSCO International
Through the establishment of this joint complex, POSCO International plans to strengthen its influence in the critical mineral supply chain in the United States while securing new business momentum. The company has already completed an EV component value chain spanning rare earths to permanent magnets and drive motor cores, accelerating its search for future growth drivers. Once the joint venture is established, the company is expected to be able to directly meet the permanent magnet demand from local automakers.
As the United States rushes to expand its domestic supply chains to reduce dependence on China for critical minerals, opportunities are growing 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 U.S.-China trade tensions intensify, China has been steadily tightening export controls on critical minerals including rare earths.
In response, the U.S. government is implementing various policies to build domestic supply chains, including the launch of a critical minerals supply chain consultative body and a strategic critical mineral stockpiling program. The industry believes that companies that secure local production hubs early will gain a competitive advantage in the North American market, given that the shortage of separation and refining infrastructure in the United States is unlikely to be resolved in the short term.
POSCO International is strengthening its raw materials and energy partnerships with the United States, which is leading the global supply chain restructuring. The day before, POSCO International signed a large-scale MOU with the U.S. state of Alaska covering cooperation in the minerals, energy, and infrastructure sectors. The two sides plan to designate rare earths, sustainable aviation fuel (SAF), methanol, geothermal energy, and energy terminals as six strategic businesses and pursue them in stages.