Vacuumschmelze and LS Eco Advanced Material to produce rare earth magnets

German company Vacuumschmelze (VAC), which specialises in magnetic materials, and the South Korean company LS Eco Advanced Materials are planning a joint venture to produce neodymium for electric car motors. The joint venture will be founded this year, and production should kick off in 2027.

Image: LS Eco Advanced Material

The joint venture will produce 1,000 tonnes of neodymium per year for car manufacturers worldwide, enough for around 500,000 electric cars. It is still unclear where the factory will be built and what share the founding companies will hold in the joint venture.

The demand for neodymium is growing, with the EV sector being one of the driving forces. Demand could reach 400,000 tonnes per year by 2030. It is currently 150,000 tonnes per year. Rare earths are, among other things, essential for magnets at the heart of electric motors. In these, an electric coil creates a magnetic field that acts against strong magnets to generate the torque that drives the vehicle’s wheels.

According to media reports, most of the current demand is met by companies producing in China, as only ten factories outside the country produce permanent magnets.

“Based on LS Cable & Systems’ non-ferrous metal processing technique, we plan to establish a rare earth magnet value chain with partner companies,” LS Eco Advanced Material CEO Lee Sang-ho said. The company is also looking into building a plant in Vietnam to produce rare earth metals.

LS Eco Advanced Material is a subsidiary of South Korea’s largest cable company LS Cable & System, which also produces copper wires for the motors of electric cars of the Korean brands Hyundai and Kia. VAC has been expanding in the past years and is also building a factory with General Motors in the US to produce rare earth magnets. Production there should start next year.

The permanent magnets will be used in a range of GM electric vehicles. Specifically mentioned are the Chevrolet Silverado EV, Blazer EV and Equinox EV, the Cadillac Lyriq, and the GMC Sierra EV and Hummer EV models in both pickup and SUV versions – in other words, nearly all Ultium models introduced to date.,


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