LS Eco Energy to Build a Defense Rare-Earth Production Hub in Vietnam

[Financial News] LS Eco Energy is building a production facility for rare earths used in defense applications in Vietnam. The move is aimed at securing a non-China supply chain ahead of U.S. restrictions on Chinese defense-related rare earths starting next year. 
LS Eco Energy said on the 30th that it will invest 11.6 billion won to build a samarium metal production facility in Vietnam.
Samarium metal is a key raw material for samarium-cobalt (SmCo) permanent magnets, which retain stable magnetism even at high temperatures. SmCo permanent magnets are mainly used in aerospace and defense applications, including fighter jets and missiles, where high heat resistance and stability are required.
LS Eco Energy will build a production facility with an annual capacity of approximately 240 tons at its LSCV site in Ho Chi Minh City, Vietnam. This capacity is sufficient to produce approximately 700 to 1,000 tons of SmCo permanent magnets annually. Trial production is scheduled to begin in December.
Starting in January 2027, the United States will extend supply-chain regulations for SmCo permanent magnets procured by the Department of Defense to the raw-material stage. As a result, the importance of a samarium supply chain outside China is expected to grow further in the defense sector.
This investment marks the first commercialization project in which cooperation between LS Eco Energy and Australia's Lynas has led to actual production. The two companies strengthened their partnership in July by mutually acquiring convertible bonds worth 30 billion won each.
Lynas is the only company outside China that separates and commercially produces rare earths. Lynas will supply the rare-earth raw materials, while LS Eco Energy will produce the metals in Vietnam and supply them to LS Cable & System's permanent-magnet plant. This will establish a non-China supply chain extending from raw materials to metals and permanent magnets.
LS Eco Energy plans to expand its rare-earth metal product lineup to include dysprosium (Dy), terbium (Tb), and neodymium-praseodymium (NdPr).
Sangho Rhee, CEO of LS Eco Energy, said, "Even South Korea, which lacks rare-earth resources, can become a key pillar of the global supply chain by manufacturing high-value-added materials and components."

[email protected] Sohyun Park Reporter