LS Eco Energy, a subsidiary of LS Cable & System, announced on February 14 that it has signed a memorandum of understanding with Vacuumschmelze (VAC), Europe's No. 1 permanent magnet company, to establish a joint venture.
The two companies will establish a legal entity by the end of the year and supply 1,000 tons of neodymium permanent magnets per year to automakers from 2027. This is enough for about 500,000 electric vehicles.
There are only about 10 producers of neodymium permanent magnets for electric vehicles globally, excluding China.
"LS Eco Energy will supply neodymium from this year, and we are also considering establishing a rare earth metal plant in Vietnam," said Lee Sang-ho, CEO of LS Eco Energy. "We plan to build a 'rare earth magnet value chain' with related companies based on LS Cable & System's non-ferrous metal refining technology."
VAC was founded in 1923 in Hanau, Germany, and has factories in Germany and Finland. In the U.S., it is building a production plant with GM. The company is expanding its global business as Europe and the U.S. have recently moved to use non-Chinese materials and components.
Neodymium magnets are a key component in the drive motors of electric vehicles, wind turbines, and home appliances. Neodymium magnets are used in electric vehicles and urban air mobility (UAM) to enhance magnetic power by adding dysporocium and turbium to neodymium.
With the growth of the electric vehicle market, the demand for neodymium magnets is soaring. According to the industry, demand for neodymium magnets is expected to more than double from 150,000 tons per year to 400,000 tons by 2030.
"We are pleased to be working with LS Eco Energy, which has a strong relationship with Korean automakers," said Erick Eschen, CEO of VAC. "Together, we can create significant business opportunities in the Asian market, including Korea."
LS Eco Energy was established in 2022 by LS Cable & System through the spin-off of its copper wire business. It supplies windings for drive motors in electric vehicles from Hyundai and Kia, and holds more than 70% of the South Korean market.
