LS Eco Energy Becomes First Non-Chinese Company to Enter Defense-Grade 'Samarium' Rare Earth Metal Production

Investing 11.6 Billion Won in Vietnam for Annual 240-Ton Facility

Response to U.S. Defense Procurement Regulations Starting in 2027

LS Eco Energy is set to become the first non-Chinese company to fully engage in the production of rare earth metals for defense purposes, a core material in the defense industry.

On September 30, LS Eco Energy announced that it would invest a total of 1.16 billion won to build a samarium metal production facility on the site of its LSCV corporation in Ho Chi Minh City, Vietnam.

LS Eco Energy Vietnam Manufacturing Corporation (LSCV) panorama. LS Eco Energy

The facility, to be established this time, will have an annual production capacity of approximately 240 tons, which is sufficient to manufacture about 700 to 1,000 tons of 'SmCo (samarium-cobalt) permanent magnets' per year with high precision. The company plans to begin pilot production in December.

Samarium metal is a key raw material for SmCo permanent magnets, which maintain powerful and stable magnetic properties even in high temperatures and extreme environments. SmCo permanent magnets have superior heat resistance compared to ordinary neodymium magnets, making them essential high-performance passive materials for next-generation aerospace and defense sectors, including fighter jets, missiles, radars, and satellites.

This investment is a proactive measure in line with the global restructuring of defense supply chains. The US Department of Defense will significantly expand supply chain restrictions for SmCo permanent magnets used in defense procurement, covering not only processing stages but also raw material stages, starting January 2027. As a result, the supply of defense parts to the US Department of Defense using Chinese rare earth raw materials will be restricted, making the establishment of non-Chinese samarium supply chains the top priority for the global defense industry.

This commercialization marks the first outcome of a strategic partnership between LS Eco Energy and Lynas, the world’s largest non-Chinese rare earth company. In July, the two firms mutually acquired convertible bonds (CB) worth 30 billion won each.

Under this integrated structure, Lynas will supply rare earth raw materials produced commercially in regions outside of China, and LS Eco Energy will refine and produce samarium metal in Vietnam, before supplying it to the permanent magnet plant of LS Cable. This process completes a ‘non-China rare earth value chain’ encompassing everything from raw material mining to metal processing and finished permanent magnet manufacturing.

LS Eco Energy plans to gradually expand its rare earth metal product lineup from samarium to include dysprosium, terbium, and neodymium–praseodymium.

Lee Sangho, CEO of LS Eco Energy, emphasized, “Korea, even though it has limited rare earth resources, can rise as a core player in the global advanced supply chain by securing advanced technologies for manufacturing high value-added materials and components.”

This content was produced with the assistance of AI translation services.