Photograph) Panoramic view of LS Eco Energy's Vietnamese production subsidiary (LSCV)


■ Investing KRW 11.6 billion in Vietnam to build 240-ton annual samarium production system
■ Aiming for December pilot production of core raw material for permanent magnets used in fighter jets and missiles
■ Preemptively establishing non-Chinese supply chain as US set to restrict Chinese products starting in 2027


LS Eco Energy (CEO Lee Sang-ho) is set to become the first full-scale producer of rare earth metals for defense applications outside of China.

The company announced on the 30th that it is investing KRW 11.6 billion in Vietnam to build a samarium metal production facility. 

Samarium is used for samarium-cobalt (SmCo) permanent magnets, which maintain stable magnetic force even at high temperatures. They are primarily used in the aerospace and defense sectors, such as for fighter jets and missiles, where high heat resistance and stability are required. 

The production facility is being constructed on the site of LSCV in Ho Chi Minh City, Vietnam, and will boast an annual capacity of approximately 240 tons. This is enough to produce roughly 700 to 1,000 tons of SmCo permanent magnets annually. Pilot production is slated for December. 

Starting in January 2027, restrictions on Chinese sources for SmCo permanent magnets procured by the US Department of Defense will be extended to the raw material level, and the strategic importance of a non-Chinese samarium supply chain is expected to grow accordingly. 

LS Eco Energy strengthened its cooperation with Australia's Lynas in July when the two companies cross-purchased convertible bonds worth KRW 30 billion each. This investment will mark the first case of actual production arising out of that partnership.

Lynas is the only company outside of China that separates and commercially produces rare earths. These rare earths are supplied to LS Eco Energy, which produces metals in Vietnam for LS Cable & System's permanent magnet plant. This is a fully non-Chinese supply chain that encompasses everything from raw materials to metals and permanent magnets. 

LS Eco Energy is currently planning to expand its rare earth metal production lineup to include dysprosium, terbium, and neodymium-praseodymium. 

"Despite its lack of rare earth resources, we expect Korea to leap forward as a core axis in the global supply chain by manufacturing high-value-added materials and components," said Lee Sang-ho, CEO of LS Eco Energy.