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LS Cable & System to establish rare earth magnet JV for electric vehicles 2024-02-14

Photograph 1) Commemorative photo taken at the ‘Permanent Magnet Business Joint Venture (JV) Business Agreement (MOU)’ ceremony held at LS Yongsan Tower in Seoul on the 14th. Lee Sang-ho, CEO of LS Eco Advanced Materials (left), and Erik Eschen, CEO of Vacuumschmelze.

Photograph 2) LS Eco Advanced Materials CI

LS Eco Advanced Materials to mass produce parts for 500,000 EVs by 2027 with Europe’s No. 1 company
Planning to build a ‘rare earth magnet value chain’ outside of China with LS Eco Energy

LS Cable & System is planning to expand its electric vehicle parts business.

LS Eco Advanced Materials (CEO Lee Sang-ho), a subsidiary of LS Cable & System, announced on the 14th that it had signed a memorandum of understanding (MOU) to establish a joint venture with Vacuumschmelze (VAC), Europe's No. 1 permanent magnet company.

The two companies plan to establish a joint venture within the year and supply 1,000 tons of neodymium permanent magnets annually to automobile manufacturers starting in 2027. This is enough to be used in approximately 500,000 electric vehicles.

Excluding China, there are only about 10 global companies producing neodymium permanent magnets for electric vehicles.

Lee Sang-ho, CEO of LS Eco Advanced Materials (and CEO of LS Eco Energy), said, “LS Eco Energy plans to supply neodymium starting this year, and is also considering establishing a rare earth metal plant in Vietnam.” He added, “Based on the non-ferrous metal refining technology of LS Cable & System, we plan to build a ‘rare earth magnet value chain’ with affiliates.”

VAC was founded in Hanau, Germany, in 1923 and has factories in Germany and Finland. In the United States, it is building a production factory with GM. Recently, there has been a movement in Europe and the United States toward using materials and parts not produced in China, and it is expanding its global business in line with this movement.

Neodymium permanent magnets are a key component for the drive motors of electric vehicles, wind power generators, and home appliances. Permanent magnets made by adding dysphorosium and terbium to neodymium to improve the magnetic force are used in electric vehicles and urban air mobility (UAM).

With the growth of the electric vehicle market, demand for neodymium magnets is also rapidly increasing. According to industry experts, demand for neodymium magnets is expected to more than double from 150,000 tons per year to 400,000 tons by 2030.
Erick Eschen, CEO of VAC, said, “We are pleased to cooperate with LS Eco Advanced Materials, which has a close relationship with Korean automobile manufacturers.” He added, “When the two companies work together, they can create great business opportunities in the Asian market, including Korea.”

LS Eco Advanced Materials was established in 2022 by splitting off the winding (copper wire) business division of LS Cable & System. It supplies drive motor windings for electric vehicles produced by Hyundai Motor Company and Kia Motors, and accounts for more than 70% of the Korean market.