POSCO International Corp. signed a memorandum of understanding with ReElement Technologies to develop what would be the first fully integrated rare earth and permanent magnet production complex in the United States, as American companies scramble to reduce dependence on Chinese supply chains.
The agreement announced Thursday comes as manufacturers face ongoing disruptions from China’s export restrictions on critical materials imposed earlier this year. While a recent trade framework has restored some access, the instability has accelerated efforts to establish domestic alternatives.
Under the partnership, the South Korean company will handle sourcing of rare earth intermediate materials and permanent magnet production, while ReElement will provide separation and refining technology. The facility would manage the entire production process from raw materials to finished magnets used in electric vehicles.
POSCO International, valued at approximately 1.2 trillion won ($9 billion), already holds substantial contracts to supply permanent magnets to automakers through 2034. However, the timeline for the proposed US facility remains unclear, and significant technical and financial hurdles must be overcome.
China currently controls about 90% of global rare earth processing and magnet production. Despite recent US investments exceeding $439 million in domestic supply chain development since 2020, American production capacity remains minimal compared to Chinese output.
The memorandum represents another attempt to diversify supply chains, though translating such agreements into operational facilities has proven challenging for the industry.
