LS Eco Energy, under South Korean chaebol LS Group, will establish a subsidiary in Vietnam to produce rare-earth samarium metal for defense and high-tech uses.
In a filing with the Korean Exchange (KRX) dated September 30, LS Eco Energy said the investment is the first such production outside China as Western buyers seek supply chains not related to Chinese rare earths.
The company’s board approved investing KRW11.6 billion ($8.3 million) for a 58 percent stake in the new company, Global Shre Metal, in an all-cash deal. The Vietnamese unit, with registered capital of KRW20 billion, will make and sell samarium metal, with the acquisition due to complete by mid-October.
Samarium is one of 17 rare-earth elements, a group of metals prized for making powerful and heat-resistant magnets. LS Eco Energy plans to build the samarium-metal plant in Ho Chi Minh City, at an existing facility, with annual capacity of about 240 tons and pilot production due to start in December.
The move responds to tighter U.S. rules on rare earth feedstock in defense supply chains. China accounts for roughly 90 percent of rare-earth processing and the bulk of magnet output. The country has tightened export controls on samarium and other rare earths.
LS Eco Energy plans to add other rare-earth metals such as dysprosium, terbium, and neodymium-praseodymium, building its rare-earth supply chain independent of China.