Posco International is moving ahead with plans to build a rare earth and permanent magnet production complex in the United States. Amid intensifying competition to secure critical minerals essential for advanced industries such as semiconductors and artificial intelligence (AI), the company is accelerating efforts to expand its U.S. operations, a linchpin of supply chains seeking to reduce reliance on China.
Posco International said on Saturday that it signed an agreement on Friday in Washington, D.C., with U.S. mineral firm ReElement Technologies to establish a joint venture for rare earth separation and refining. The final agreement followed a memorandum of understanding (MOU) signed in September last year, after the two sides ironed out detailed terms.
The companies plan to jointly invest a total of $200 million (about 301.1 billion won) to build a rare earth separation and refining plant in the U.S. 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 to ensure stable sourcing of rare earth raw materials from domestic and overseas mines as well as recycled resources.
Of the total investment, $100 million will be allocated first to plant and equipment construction and initial operating funds. The remaining $100 million will be used for capacity expansion based on future market demand. The first phase will establish a 3,000-ton annual production system, followed by a second-phase expansion to bring capacity to 6,000 tons. The rare earth plant is targeting pilot production in the fourth quarter of next year and mass production in 2028.
The joint venture is expected to become the first integrated production base in the U.S. that vertically integrates the entire process, from rare earth raw material separation and refining to permanent magnet manufacturing and the recycling of waste materials and scrap magnets. Permanent magnets, high-performance magnets made from rare earth alloys, are widely used across advanced industries including electric vehicles, semiconductors, defense, robotics, and AI data centers.
Through the joint complex, Posco International aims to strengthen its influence in the U.S. critical mineral supply chain while securing new business momentum. The company has already completed an EV component value chain spanning rare earths, permanent magnets, and drive motor cores, and is accelerating efforts to identify future growth engines. Once the joint venture is established, it is expected to directly address permanent magnet demand from local automakers.
As the U.S. rushes to expand domestic supply chains to reduce its dependence on China for critical minerals, opportunities are growing for Korean firms including Posco International. China currently accounts for roughly 70% of global rare earth production and more than 90% of refining and processing. As U.S.-China trade tensions intensify, China has been steadily tightening export controls on critical minerals including rare earths.
Posco International is strengthening raw material and energy partnerships with the U.S., which is leading the realignment of global supply chains. The day before, Posco International signed a large-scale MOU with the state of Alaska covering cooperation in minerals, energy, and infrastructure. The two sides designated rare earths, sustainable aviation fuel (SAF), methanol, geothermal energy, and energy terminals as six strategic businesses to be pursued in stages.
“This joint venture goes beyond simply building a refining plant — it marks the starting point for building a critical mineral value chain in the U.S. that connects raw materials to finished materials,” Posco International CEO Lee Kye-in said. “Combining the two companies’ global supply chain capabilities with innovative separation and refining technology will create significant synergy.”
Mark Jensen, CEO of ReElement, also emphasized, “Through this joint venture, we will build an integrated production system that fills a supply chain gap in the market.”