Supply chain links Lynas rare earth materials, LS Eco Energy’s metal production and LS Cable & System’s permanent magnets
LS Eco Energy is moving into the production of defense-grade rare earth metals in Vietnam as it seeks to establish a non-China supply chain for strategic materials used in aerospace and defense applications.
The company said it will invest 11.6 billion won ($8 million) to build a samarium metal production facility at its LSCV manufacturing site in Ho Chi Minh City, Vietnam. Trial production is scheduled to begin in December.
The facility will have an annual production capacity of about 240 tons of samarium metal, enough to support the production of approximately 700 to 1,000 tons of samarium-cobalt, or SmCo, permanent magnets per year.
Samarium Gains Importance in Defense Supply Chains
Samarium is a key raw material used in SmCo permanent magnets, which can maintain stable magnetic performance at high temperatures. Their heat resistance and reliability make them suitable for demanding aerospace and defense applications, including fighter aircraft and missiles.
The investment comes as the United States moves to tighten restrictions on Chinese materials used in defense procurement.
From January 2027, U.S. restrictions covering SmCo magnets for Department of Defense procurement are set to extend further across the supply chain. The regulatory shift is increasing demand for alternative sources of samarium and related materials outside China.
LS Eco Energy aims to position its Vietnamese facility as an early production base capable of responding to this shift.
Lynas, LS Eco Energy and LS Cable & System Link Supply Chain
The project also marks the first move into commercial production under LS Eco Energy’s partnership with Australian rare earth producer Lynas.
The two companies strengthened their partnership in July by mutually acquiring convertible bonds worth 30 billion won each.
Under the planned supply chain, Lynas will provide rare earth feedstock, which LS Eco Energy will process into metal in Vietnam. The material will then be supplied to LS Cable & System’s permanent magnet operations.
The arrangement is designed to connect rare earth feedstock, metal processing and permanent magnet manufacturing through a supply chain outside China, linking operations in Australia, Vietnam and South Korea.
For LS Eco Energy, the project also represents an expansion beyond its established power cable business into higher-value strategic materials. The company plans to leverage its existing manufacturing infrastructure in Vietnam as it develops the new business.
Rare Earth Portfolio to Expand Beyond Samarium
LS Eco Energy plans to broaden its rare earth metal portfolio after establishing samarium production.
Future products are expected to include dysprosium, terbium and neodymium-praseodymium, or NdPr, which are widely used in high-performance permanent magnets for electric vehicles, robotics, wind power and other advanced industries.
The strategy is intended to combine LS Eco Energy’s production capabilities in Vietnam with the broader LS Group’s materials and component businesses as global manufacturers seek more diversified sources of critical minerals.
“Even South Korea, which has limited rare earth resources, can become a key player in the global supply chain through the production of high-value-added materials and components,” LS Eco Energy CEO Lee Sang-ho said.
LS Eco Energy plans to begin trial production of samarium metal in December and gradually expand its production portfolio as it builds a broader non-China rare earth supply chain.
