South Korea’s POSCO International is targeting an annual rare earth supply of $230 million from Southeast Asia, as it accelerates efforts to build a stable global supply chain for heavy rare earth elements critical to electric vehicle (EV) traction motors.

In a press release on Tuesday, the South Korean giant said it plans to establish a $30-million joint venture in Malaysia with a specialized local partner to advance rare earth separation and refining. The project will focus on validating environmentally friendly mining practices and ensuring stable production systems before moving into full-scale mass production. Besides, POSCO International is participating in a rare earth separation and refining project in Laos, further expanding its raw material procurement network across the region.

These regional efforts form part of a broader strategy to reduce supply chain risks associated with heavy rare earth elements such as dysprosium and terbium, which are essential for high-performance magnets used in EV motors. With production and refining currently concentrated in a limited number of countries, securing diversified sources has become a priority.

Alongside its Southeast Asia expansion, POSCO International has launched a KRW25 billion ($16.7 million) corporate venture capital (CVC) fund in partnership with POSCO Investment. The fund’s first investment of KRW8 billion targets a company specializing in rare earth separation and refining, with proprietary technology capable of producing high-purity rare earth oxides and metals.

Through this series of investments, POSCO International aims to establish a complete rare earth value chain—from mining and refining to permanent magnet production—and integrate it with traction motor core manufacturing to strengthen its EV components business. POSCO Holdings, the parent firm of POSCO International, invested KRW 1.1 trillion last year to expand its lithium portfolio, including stakes in Australian mines and Argentine brine projects.

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