LS Cable is set to establish a rare earth permanent magnet production base in Gumi, North Gyeongsang Province. The company aims to secure an annual production capacity of over 1,000 tons to supply magnets for electric vehicles and robots, with plans to expand production to defense-related products in the future. A key aspect of the project is connecting the supply chain for rare earth permanent magnets from Australia, Vietnam, South Korea, and the United States, reducing reliance on China.
On October 30, LS Cable announced that its subsidiary, Korea Motion Works, signed an investment agreement with the North Gyeongsang provincial government and Gumi city for the construction of a production facility worth approximately 350 billion won (about $2.6 billion). Korea Motion Works plans to break ground in the first half of 2027 and begin mass production in the second half of 2028.
The facility will produce neodymium (NdFeB) permanent magnets used in electric vehicle motors and robots, with plans to later expand production to samarium-cobalt (SmCo) permanent magnets for defense applications. If production capacity reaches the target of over 1,000 tons annually, it would account for about 17% of the domestic demand of approximately 6,000 tons.
The significance of this investment goes beyond just securing magnet production facilities. LS Cable is looking to integrate the supply of rare earth raw materials from Australia’s Lynas with rare earth metal production from LS Eco Energy in Vietnam, while also establishing a manufacturing supply chain for permanent magnets in the U.S. and South Korea. This strategy aims to create a diversified supply chain that does not rely on China for raw material procurement, metal production, and magnet manufacturing.
Rare earth permanent magnets are essential materials used in electric vehicle drive motors and robots. By expanding production to include defense products, LS Cable aims to meet the material demands of both civilian and defense industries. However, the actual effectiveness of diversifying the supply chain will depend on whether the construction of the factory and mass production proceed as planned, and whether raw material procurement and subsequent processes are reliably connected.
LS Cable cited Gumi's manufacturing infrastructure and industrial base as reasons for selecting the investment site. Gumi has been designated as a national advanced strategic industry specialized zone for robotics. The company plans to leverage its existing manufacturing capabilities and regional industrial base to expand its advanced materials business.
This agreement marks the investment planning stage for the construction of the production facility. Future timelines for groundbreaking, mass production, actual production volumes, and securing clients will serve as benchmarks for assessing the feasibility of the project.
* This article has been translated by AI.
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