# LS Eco Energy builds Vietnam samarium line as US rules loom *The Seoul-based supplier will spend 11.6 billion won for 58% of Global Shre Metal to produce 240 tons of defense-grade material yearly, as affiliates weigh a domestic magnet plant.* **Published:** September 30, 2026 **By:** Ji-woo Han **Section:** Semiconductors & AI Hardware — South Korea **Format:** Breaking **Confidence:** medium **Source:** https://eastasiabrief.com/semiconductors/ls-eco-energy-builds-vietnam-samarium-line-us-rules-445 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - LS Eco Energy commits 11.6 billion won for 58% stake in Vietnam unit Global Shre Metal - Plant will process 240 tons of samarium metal annually for 700 to 1,000 tons of defense magnets - Share transaction closes Oct. 16 ahead of January 2027 US defense procurement rules ![A technician uses a spatula to examine metal powder samples near a digital scale inside a metal processing facility. (AI-generated image)](https://eastasiabrief.com/media/2026-09-30-2b07d4a134b3.webp) *A technician uses a spatula to examine metal powder samples near a digital scale inside a metal processing facility. (AI-generated image)* South Korea's LS Eco Energy said Sept. 30 it will invest 11.6 billion won ($8.4 million) to build a defense-grade samarium metal processing plant in Ho Chi Minh City, Vietnam. The expenditure purchases 21,139,872 shares, or a 58.0% controlling stake, in a newly incorporated entity named Global Shre Metal. Outside financial partners hold the remaining 42.0% equity interest. The Vietnam unit will produce 240 metric tons of samarium metal each year. That volume provides sufficient chemical precursor to manufacture between 700 and 1,000 metric tons of heat-resistant permanent magnets. The investment represents 5.14% of the equity capital of LS Eco Energy, according to a regulatory disclosure submitted to the Financial Supervisory Service. The board resolved the capital transfer earlier in the day. Samarium is an elemental rare earth metal used to fabricate samarium-cobalt magnets. These components retain magnetic power at temperatures exceeding 300 degrees Celsius, making them indispensable for precision guided missiles and military radar. Standard neodymium magnets degrade in extreme heat environments found inside supersonic jet turbines and electronic warfare pods. Defense contractors rely entirely on samarium alloys to maintain flight actuator reliability under combat thermal loads. The manufacturing unit will sit inside the existing industrial complex of LS-VINA Cable & System in Ho Chi Minh City. The facility will be the first operational samarium metal plant outside China. China currently refines more than 90% of global samarium output and controls roughly 85% of total rare earth permanent magnet manufacturing. Western defense supply chains have lacked an independent domestic refining alternative. The new processing plant will source unrefined rare earth compounds directly from Lynas Rare Earths. The Australian miner operates the only commercial-scale rare earth separation facility outside China, in Malaysia. LS Eco Energy and Lynas cemented their supply partnership in July through reciprocal investments. Each firm purchased 30 billion won in three-year convertible bonds issued by the other to guarantee feedstock quotas. Under that arrangement, Lynas ships separated rare earth salts to the Vietnamese facility. LS Eco Energy converts those chemical salts into refined industrial metals, which feed downstream magnet pressing operations. Pilot production runs in Ho Chi Minh City are scheduled to begin in December. The engineering timetable aims to satisfy strict new procurement rules issued by the United States Department of Defense. The Pentagon rules will prohibit defense contractors from purchasing samarium-cobalt magnets containing Chinese materials starting in January 2027. The restriction enforces full origin traceability back to the mined ore and raw metal stages. Domestic Korean media reported Sept. 30 that parent company LS Cable & System plans to construct a separate magnet plant in Gumi, South Korea. The plant would serve automotive and defense clients. The reported Gumi project involves an estimated capital outlay ranging from 150 billion to 200 billion won ($147 million). The plant would fabricate neodymium and samarium magnets for robotics and electric vehicles. Neither LS Cable & System nor its parent holding company LS Corp. has published a regulatory filing or corporate statement confirming the reported 150 billion to 200 billion won investment in Gumi. The Gumi plant reports did not specify equipment purchase dates, site acquisition details or municipal permits. Factory construction timelines in North Gyeongsang Province also remain unaddressed in public records. LS Eco Energy plans to expand its Vietnamese metallurgical facility beyond samarium processing. Future expansion phases will target heavy rare earths such as dysprosium, terbium and neodymium-praseodymium blends. Those additional elements enhance thermal durability in traction motors for battery electric vehicles and industrial wind turbine generators. Most Korean electric drive makers currently import those finished sintered blocks from Chinese vendors. Commercial magnet fabrication requires specialized alloying furnaces, high-pressure hydraulic presses and cleanroom sintering lines. Securing pure metal feedstock represents the most restrictive bottleneck for non-Chinese manufacturers. South Korea can establish itself as a central pillar in global critical materials by manufacturing high-value components, Chief Executive Officer Lee Sang-ho said in a corporate statement accompanying the board filing. The final cash payment for the 21,139,872 shares in Global Shre Metal will close Oct. 16, according to the regulatory filing submitted to the Korea Exchange. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Defense rare earth rules | LS Eco Energy secures 240 tons non-China samarium metal | State refiners face exclusion from US defense magnet procurement | Magnet makers gain secondary non-Chinese alloy sourcing | Aerospace primes de-risk SmCo supply ahead of Jan. 2027 ban | ## In this story - **Companies:** LS Eco Energy, LS Cable & System - **Tickers:** 229640.KS - **Exposed:** Lynas Rare Earths - **Policy:** Export Controls, Economic Security - **Impact:** Supply Chain, Capex, Compliance ## Primary sources 1. donga.com 2. specialtimes.co.kr 3. daum.net 4. digitaltoday.co.kr 5. asiae.co.kr --- Cite as: East Asia Brief, "LS Eco Energy builds Vietnam samarium line as US rules loom," September 30, 2026. https://eastasiabrief.com/semiconductors/ls-eco-energy-builds-vietnam-samarium-line-us-rules-445