November 23, 2024

• 

Posco International's headquarters in Songdo, Incheon (Posco International )

Posco International, the trading and energy arm of Korean steel giant Posco, announced Tuesday that it has recently secured a substantial order for rare earth permanent magnets, an essential part of an electric vehicle drive motor core, through its overseas subsidiaries.

The US subsidiary of Posco International plans to procure permanent magnets worth some 900 billion won ($685 million) from 2026 to 2031, for a global automaker in North America. The magnets produced will be utilized in the drive motors of the company's medium and large-sized electric vehicle models.

Similarly, Posco International's German subsidiary inked a permanent magnet supply agreement worth some 260 billion won from 2025 to 2034, with a premium European car brand.

Citing deal conditions, the company declined to reveal the names of its clients.

Rare earth permanent magnets exhibit magnetic forces dozens of times stronger than conventional magnets and are utilized in over 80 percent of electric vehicle drive motors.

The permanent magnets secured by Posco International's overseas subsidiaries will not rely on rare earths from China, which accounts for over 90 percent of rare earths sourced globally, but will instead utilize raw materials obtained from the United States, Australia and Vietnam.

Star Group Industrial Co., the sole manufacturer of rare earth permanent magnets here, has committed to producing these magnets.

Posco International emphasized that the supply contract aims to bolster its stable mobility business through large-scale orders while diversifying the permanent magnet supply chain away from China.

Furthermore, the company plans to expand its value chain to solidify its role as a primary supplier of eco-friendly vehicle propulsion systems. It intends to bundle all necessary components for rotators and stators, which are vital elements of EV drive systems, and distribute them to both domestic and global automakers.

An eco-friendly vehicle model featuring Posco International's drive motors (Posco International )