LS Cable to Invest 350 Billion Won in Gumi, South Korea, Building Rare Earth Magnet Plant Covering 17% of Domestic Demand

Republished by AIC Engineering. All rights belong to the original publisher; see Source below.

Korea Motion Works, the rare earth permanent magnet subsidiary of South Korea's LS Cable & System, has signed a 350 billion won (approximately USD 261.9 million) investment agreement with Gyeongsangbuk-do and Gumi City to build South Korea's largest permanent magnet production plant in Gumi. Construction begins in the first half of 2027, with mass production of neodymium (NdFeB) magnets starting in the second half of 2028, later expanding to samarium-cobalt (SmCo) magnets for defense applications. Annual capacity will be 1,000 tons, about 17% of South Korea's roughly 6,000-ton annual demand. The key aim is a China-free supply chain linking Australian rare earths from Lynas with metal processing by LS Eco Energy in Vietnam, from raw material to finished product.

Key Elements

LS Cable & System is building South Korea's largest rare earth permanent magnet production base in Gumi, North Gyeongsang Province. The plan is to bypass the rare earth supply chain concentrated in China while securing core materials for robots, electric vehicles and defense applications within South Korea.

LS Cable & System said on the 30th that its rare earth permanent magnet subsidiary, Korea Motion Works, signed a memorandum of understanding (MOU) with Gyeongsangbuk-do and Gumi City for the construction of a 350 billion won (approximately USD 261.9 million) production facility. The signing ceremony was held the previous day, the 29th. Construction will begin in the first half of 2027, with mass production starting in the second half of 2028.

The initial products are neodymium (NdFeB) permanent magnets used in drive motors for robots and electric vehicles. The lineup will later expand to samarium-cobalt (SmCo) permanent magnets for defense applications. The Gumi plant's annual production capacity will be 1,000 tons, about 17% of South Korea's roughly 6,000-ton annual demand for permanent magnets.

Category | Details Investment size | 350 billion won (approximately USD 261.9 million) Construction / mass production | Groundbreaking in H1 2027, mass production in H2 2028 Annual capacity | 1,000 tons (17% of South Korea's ~6,000-ton demand) Main products | Neodymium (NdFeB) → samarium-cobalt (SmCo) Supply chain structure | Australian raw material from Lynas → metal processing by LS Eco Energy in Vietnam → finished products in South Korea and the U.S.

The core of the investment is completing a supply chain that does not pass through China, from raw material procurement to finished products. The three-stage structure has Australian rare earths company Lynas supplying raw material, LS Eco Energy processing it into metal in Vietnam, and finished permanent magnets being made in South Korea and the United States. LS Cable & System plans to make the Gumi plant the central production hub of this non-China supply chain and use it to target the global defense, robotics and electric vehicle markets.

The existing manufacturing base is behind the choice of Gumi as the site. Gumi is a designated specialized complex for the national high-tech strategic robotics industry, and LS Cable & System has operated production facilities there for decades. The investment attraction efforts of Gyeongsangbuk-do and Gumi City also helped tip the decision, according to the company.

Hong Young-ho, CEO of Korea Motion Works, said, "The active investment attraction efforts and cooperative commitment of Gyeongsangbuk-do and Gumi City were a great help in this investment decision," adding, "We will foster Gumi into a rare earth permanent magnet production hub that the world takes notice of."

Rare earth permanent magnets are materials made by alloying rare earth elements such as neodymium and samarium with transition metals such as iron and cobalt. They have the strongest magnetic properties of any permanent magnet in existence. They are used as core components in electric vehicle drive motors and are also mounted in permanent magnet synchronous generators for offshore and large-scale wind turbines, reducing mechanical losses and raising power generation efficiency.

The investment aligns with a broader push by South Korea's materials industry to diversify rare earth procurement, which is heavily dependent on China. The 1,000-ton annual scale covers only 17% of South Korean demand, but it is significant as a case in which every stage — raw material, processing and manufacturing — is tied to a non-China route. With demand from robotics, electric vehicles and defense all growing at once, companies that need these materials now have an alternative for reducing procurement risk. However, with mass production set for the second half of 2028, it will take considerable time before the actual supply effect materializes.

Source

• BigGo Finance (2026-10-30)
• Original article: LS Cable to Invest 350 Billion Won in Gumi, South Korea, Building Rare Earth Magnet Plant Covering 17% of Domestic Demand
• https://finance.biggo.com/news/5894d4ae-719e-48f6-820b-5f227d92e074