On January 10, South Korea’s LS Eco Energy announced that it has signed a rare earth oxide purchase agreement with Vietnamese mining company Hung Thinh Minerals.

Under the agreement, LS Eco Energy will supply neodymium, dysprosium, and other rare earth oxides refined by the Hung Thinh Group to domestic and international permanent magnet manufacturers. These magnets are used in the production of essential components, such as motors.

The company will bolster its supply from 200 tonnes in 2024 to more than 500 tonnes annually starting in 2025. Currently, the market price of neodymium is around KRW100 million ($76,000) per tonne.

The tie-up will help LS Eco Energy maintain the stability of its rare earth supply chain by diversifying import resources and reducing dependence on China.

This deal marks the South Korean firm’s first large-scale rare earth supply chain outside of China, the world’s top processor of rare earths. However, sourcing rare earth from China is becoming tough due to its restrictions on the export of some rare earth technologies.

In terms of reserves, Vietnam ranked second in the world behind China in 2022, and is predicted to provide a steady supply of rare earth in the future. Leveraging a local network spanning over three decades in Vietnam, LS Eco Energy intends to become the market leader in the country’s rare earth industry.

“We will expand our supply through additional contracts with other mining companies, and for this purpose, we plan to secure rare earth oxide separation and refining technology,” said Lee Sang-ho, CEO of LS Eco Energy.

Rare earths are groups of elements that are crucial to the world’s shift to cleaner energy sources, since they are used in batteries and the production of electronics. Vietnam plans to step up its technologies for mining and processing to achieve a total output of more than 2 million tonnes per year.

Vietnam Investment Review