LS Cable & System Ltd, the electrical and power generation infrastructure unit of South Korea’s LS Group, has announced that it plans to build a rare earth permanent magnet production facility in South Korea, according to local reports, as it looks to strengthen the country’s defence, robotics and electric vehicle (EV) supply chains. Permanent magnets are essential components in electric motors that drive electric vehicles (EVs) and other electrical equipment.

The company confirmed that its Korea Motion Works subsidiary has signed a memorandum of understanding (MoU) with South Korea’s North Gyeongsang provincial authorities and the City of Gumi to invest KRW 350 billion (US$ 261 million) in the new rare earth magnet plant in Gumi. The company said it also plans to produce permanent magnets in the US.

The new plant in Gumi will help reduce South Korea’s dependence on Chinese supply chains. It plans to source rare earth materials from Australia's Lynas Rare Earths Ltd, with metals to be sourced from LS Eco Energy in Vietnam.

Construction of the Gumi facility is scheduled to begin in early 2027, with mass production of neodymium-iron-boron magnets for EVs and robots expected to be launched in late 2028, followed by production of samarium-cobalt magnets which are used mainly for defense equipment.

The plant is expected to have a production capacity of over 1,000 tons per year, equivalent to about 17% of South Korea's total magnet demand.

Korea Motion Works’ CEO, Hong Young-ho, said in a statement: “The support of North Gyeongsang Province and Gumi played a major role in our investment decision. We will develop Gumi into a production hub for rare earth permanent magnets.”