ReElement and Posco ink US rare earth and magnet production deal

Dive Brief:

• ReElement Technologies and Posco International, a South Korea-based steel trading and energy group, have created a joint venture to develop integrated rare earth and magnet production in the United States for the first time.
• The two companies plan to invest a combined $200 million to build a rare earth separation and purification plant with an annual capacity of 6,000 metric tons. They also plan to establish an integrated complex for permanent magnet production with the money.
• The joint venture aims to create a “closed loop, end-to-end rare earth supply chain” to support the electric vehicle, artificial intelligence, semiconductor, defense and renewable energy sectors, according to a news release. ReElement and Posco International executives signed the deal on May 21 in Washington, D.C., and are evaluating potential site locations.

Dive Insight:

The joint venture builds on the companies’ existing partnership, including a commercial offtake agreement signed in September that aimed to reduce U.S. dependence on rare earth materials from China.

Today, China accounts for 60% of global mined production of magnet rare earths, representing one of the most geographically concentrated industries in the world, according to the International Energy Agency. The country’s global share is more dominant for refining and permanent magnet production at more than 90% and nearly 95%, respectively. When China has implemented export controls, the discrepancy has disrupted U.S. manufacturers looking for supply and ultimately slowed production as a result.

“Together, we are establishing a secure, non-China supply chain that supports national security, clean energy, and the next generation of advanced technologies,” ReElement CEO Mark Jensen said in a statement.

Posco International will manage the joint venture as a majority shareholder with deep relationships in the automotive and industrial markets, while ReElement will provide its core separation and purification technologies, according to a news release. The effort will connect raw materials from Southeast Asia to permanent magnet production in the U.S.

ReElement and Posco International aim to produce 3,000 metric tons per year of separated rare earth oxides by 2028, with plans to double capacity by 2030.

The U.S. mined and produced 51,000 metric tons of rare earth oxides last year, a fraction of China’s 270,000 metric tons during the same period, according to the U.S. Geological Survey.

In addition to oxide production, the companies plan to incorporate light and heavy rare earth metalization capabilities, permanent magnet manufacturing capacity and integrated feedstock sourcing with a focus on domestic and international primary and recycled resources.

Jensen said the joint venture will address “one of the most critical gaps” in the rare earth market.

“This is not just about building capacity – it’s about building a new model. One that is modular, scalable, and capable of aligning with the rapidly evolving needs of domestic and allied markets,” he said.

American Resources Corporation, a recycler and raw materials supplier of rare earth elements, has a minority stake in ReElement. Posco International is a subsidiary of steel manufacturer Posco, which recently partnered with Hyundai Steel to construct an electric arc furnace steel mill in Donaldsonville, Louisiana.