LS Eco Energy is accelerating the establishment of a non-China rare earth supply chain through mutual investments with Australian rare earth company Lynas.
On July 27, LS Eco Energy announced that it has signed a contract to mutually acquire convertible bonds (CB) worth 30 billion won with Lynas. This follows a rare earth business cooperation agreement made in March, moving beyond a simple raw material supply contract to establish a long-term collaborative framework.
Lynas is effectively the only company capable of large-scale commercial production of rare earth raw materials outside of China. Through this investment, LS Eco Energy aims to secure a stable supply of essential raw materials for its rare earth business and lay the groundwork for expansion.
As China has tightened its rare earth export controls, efforts to diversify supply chains have accelerated, particularly in the U.S. and Europe. Rare earths are critical materials used across advanced industries, including defense, electric vehicles, robotics, and wind power. There is a growing trend to secure non-China rare earths, even at higher costs, to ensure supply stability.
LS Eco Energy plans to become the first company outside of China to produce samarium metal for defense applications. Samarium is a key material for samarium-cobalt permanent magnets used in fighter jets, missiles, and radar systems. The company intends to gradually expand its production to include metals such as dysprosium (Dy), terbium (Tb), neodymium (Nd), and praseodymium (Pr).
Through this collaboration, Lynas will supply rare earth raw materials, while LS Eco Energy will produce metals, establishing a value chain where LS Cable manufactures permanent magnets. The goal is to create a supply chain that does not involve China, targeting the demand for non-China rare earths from defense and advanced industry clients.
Lee Sang-ho, CEO of LS Eco Energy, stated, "This investment is a strategic decision that demonstrates the strong commitment of Lynas and LS Eco Energy to grow the rare earth business together. We will lead the global market based on a stable raw material supply chain."
* This article has been translated by AI.
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