# EMAT expands Pohang rare earth magnet output to 6,000 tons *A 300 billion won investment targets supply chain shifts before Pentagon restrictions on Chinese neodymium components take effect in 2027.* **Published:** October 28, 2026 **By:** So-yeon Jung **Section:** Energy & Critical Minerals — South Korea **Format:** Breaking **Confidence:** high **Source:** https://eastasiabrief.com/energy-minerals/emat-expands-pohang-rare-earth-magnet-output-6-000-978 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - EMAT commits 300 billion won ($227 million) to expand Pohang magnet capacity to 6,000 metric tons - Pentagon DFARS rule bans Chinese rare earth permanent magnets from Jan. 1, 2027 - Ulvac supplies 13 sintering lines as Pohang site prepares Dec. 17, 2026 ribbon cutting ![Robotic arms move round metal discs along a factory conveyor line while technicians in hard hats work near an industrial furnace. (AI-generated image)](https://eastasiabrief.com/media/2026-10-28-943aac796f51.webp) *Robotic arms move round metal discs along a factory conveyor line while technicians in hard hats work near an industrial furnace. (AI-generated image)* Evolution Metals & Technologies Corp. confirmed Oct. 28, 2026 that its South Korean unit will commit 300 billion won ($227 million) to expand sintered neodymium magnet capacity in Pohang to 6,000 metric tons. The phased spending package scales up commercial manufacturing of high-performance sintered neodymium-iron-boron magnets at the Blue Valley National Industrial Complex. Sintered magnets generate the magnetic flux that drives electric vehicle traction motors and industrial robotics. South Korea imports more than 90% of its permanent magnets from China. The Pohang expansion establishes domestic processing capacity to supply Tier-1 automotive and defense component vendors seeking non-Chinese sourcing, the company said. The investment agreement spans 118,118 square meters within Manufacturing Block 18 of the industrial complex. Local operating subsidiary KMMI Inc. will execute the expansion through 2030, according to municipal authorities in North Gyeongsang Province. The project expands an established operating site rather than breaking ground on an undeveloped property. KMMI launched operations in Pohang in 2021, and parent firm EMAT listed a baseline capacity of 660 metric tons in regulatory filings. Technicians are installing 13 sintering furnace lines purchased from Japan's Ulvac during October and November, company filings indicate. Sintering — heating compressed metal powders below their melting point to fuse them — gives permanent magnets their mechanical density. The production lines manufacture N42SH sintered grades designed for high-stress applications, EMAT stated in recent filings. The SH classification certifies that the magnets resist thermal demagnetization inside electric powertrain assemblies operating at elevated temperatures. Commercial urgency stems from a pending United States defense acquisition mandate known as DFARS 252.225-7052. The regulation imposes a ban on Chinese rare earth permanent magnets in Pentagon procurement programs starting Jan. 1, 2027. The Pentagon restriction requires aerospace and defense contractors to verify that critical neodymium magnets contain zero Chinese processed material. Western contractors are actively securing certified manufacturing alternatives in allied Asian hubs, EMAT said. China maintains control over roughly 90% of global rare earth magnet production and nearly all heavy rare earth separation capacity. Heavy elements like dysprosium and terbium remain essential additives that keep sintered magnets operational under extreme heat. The capital injection will alter EMAT's operating profile as production lines come online. EMAT projected fiscal 2026 revenue of $10 million to $11 million, with annual guidance jumping to $400 million to $460 million in fiscal 2027. EMAT completed a listing on the Nasdaq exchange in January 2026 through a business combination. Its latest quarterly financial report listed $5.3 million in cash reserves alongside capital commitments required to support international factory buildouts. The full factory expansion will create approximately 120 technical and assembly positions in Pohang. Pohang Mayor Park Yong-seon and North Gyeongsang Province Deputy Governor Yang Geum-hee signed the investment memorandum with company leadership. The municipal government plans to accelerate infrastructure support for the facility, local officials said. Regional planners aim to integrate the magnet plant into a broader advanced manufacturing cluster alongside secondary battery cathode producers. The Pohang operation integrates stages from alloy powder preparation to vacuum sintering and surface coating. Domestic finishing reduces supply disruptions for Korean automakers Hyundai Motor and Kia, which remain heavily exposed to Chinese critical mineral export controls. Other Korean firms are developing adjacent supply chain capacity. Star Group Industrial produces sintered neodymium magnets at its Daegu facility, while the Korean Metals Plant in Ochang processes rare earth metals from non-Chinese concentrate. The planned 6,000-ton capacity also includes production lines for non-rare-earth magnets, the memorandum shows. Deploying alternative magnetic materials allows motor manufacturers to limit raw material cost volatility when neodymium prices experience market spikes. Japanese suppliers Shin-Etsu Chemical and TDK dominate high-end sintered magnet production outside China. EMAT aims to position its Pohang manufacturing lines as an alternative merchant supplier for international automotive and industrial customers. KMMI completed initial prototype production in 2024 and secured qualification on several sintered magnet product grades. The newly delivered Ulvac sintering furnaces will undergo vacuum pressure calibration before full commercial processing ramps up. The company has not disclosed the specific mining operators or contracted delivery volumes for its non-Chinese neodymium-praseodymium raw metal supply. Municipal releases and regulatory disclosures do not name the upstream refiners supplying feedstock to the plant. EMAT will host an official ribbon-cutting ceremony at the Pohang facility on Dec. 17, 2026. Commercial volume production will expand across next year to satisfy customer qualification deadlines ahead of the 2027 defense procurement cutoff. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Pohang permanent magnet expansion | KMMI adds 6,000 t/yr sintered capacity for Hyundai Motor and domestic supply chain | Exporters face loss of US-bound traction motor magnet orders under DFARS ban | Ulvac books orders for 13 sintering lines while Shin-Etsu Chemical faces new Korean competition | EV and defense supply chains gain non-Chinese sintered NdFeB capacity ahead of Jan. 1, 2027 deadline | ## In this story - **Companies:** Evolution Metals & Technologies Corp., KMMI Inc. - **Tickers:** EMAT - **Exposed:** Ulvac, Hyundai Motor, Kia, Star Group Industrial, Shin-Etsu Chemical, TDK - **Policy:** Procurement Rules, Export Controls - **Impact:** Supply Chain, Capex ## Primary sources 1. sec.gov 2. ket.kr 3. dailydgnews.com 4. kyongbuk.co.kr 5. ynenews.kr --- Cite as: East Asia Brief, "EMAT expands Pohang rare earth magnet output to 6,000 tons," October 28, 2026. https://eastasiabrief.com/energy-minerals/emat-expands-pohang-rare-earth-magnet-output-6-000-978