POSCO International has teamed with American rare earth processor ReElement Technologies to construct a production complex in the United States, betting on escalating concerns over China’s control of critical minerals supply chains.
The Korean company’s announcement comes as China maintains export restrictions on seven rare earth elements implemented in April, disrupting manufacturers worldwide and highlighting vulnerabilities in global supply networks. POSCO already holds contracts worth 1.2 trillion won ($9 billion) to supply permanent magnets to North American and European automakers through 2034.
The planned facility would mark America’s first vertically integrated rare earth and magnet production site, handling everything from raw material processing to manufacturing and recycling. ReElement, a unit of American Resources Corporation, will provide separation and refining technology while POSCO manages sourcing and magnet production.
China controls nearly 70% of rare earth extraction and 90% of global processing capacity, giving Beijing significant leverage over industries from electric vehicles to defense systems. Recent European Union data shows only 13.5% of companies seeking Chinese rare earth export licenses have received approval, underscoring supply vulnerabilities.
The partnership faces substantial challenges. Alternative rare earth processing typically costs more than Chinese operations, while building domestic capacity requires years of development and substantial capital investment. Whether the venture can compete economically with established Chinese suppliers remains uncertain.
