POSCO Holdings Inc., South Korea’s major steel company, is accelerating its efforts to establish a foothold in the electric vehicle (EV) supply chain, aligning with its strategy to diversify beyond steel production. The company’s trading and energy exploration arm, POSCO International Corp., is reportedly in negotiations with Korean rare earth permanent magnet leader, Star Group Industrial Co., to construct a joint permanent magnet manufacturing factory in the U.S. The facility, expected to have an initial capacity of 3,000 tons per year (expandable to 5,000 tons), will be pivotal in EV drive motor core production. The magnets are crucial for EV efficiency and performance.
The project aims to supply major U.S. automakers like General Motors, Ford, and Stellantis, as well as secure orders from Hyundai and Kia’s U.S. plants. The endeavor, part of POSCO’s strategy to diversify its business portfolio beyond steel, reflects the company’s commitment to the EV sector, one of its seven key growth engines. The U.S. rare earth permanent magnet market is currently dominated by Chinese players, making this venture a significant step toward reducing reliance on imports.
The joint venture, still in negotiations for stake distribution, will bolster POSCO’s presence in the growing EV industry. The company’s extensive global network, coupled with Star Group’s expertise in rare earth permanent magnet production, is expected to create a successful synergy. The factory is set to complement POSCO Mobility Solution, a subsidiary specializing in drive motor core manufacturing. This expansion further solidifies POSCO’s position in the EV ecosystem, encompassing automotive steel, battery materials, parts production, and waste battery recycling.
