# LS Eco Energy readies 240-ton Vietnam plant for defense samarium *The 11.6 billion won Ho Chi Minh City facility will supply non-Chinese feedstock for up to 1,000 metric tons of samarium-cobalt magnets annually.* **Published:** November 7, 2026 **By:** Ji-woo Han **Section:** Semiconductors & AI Hardware — South Korea **Format:** Company Watch **Confidence:** medium **Source:** https://eastasiabrief.com/semiconductors/ls-eco-energy-readies-240-ton-vietnam-plant-defense-1201 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - LS Eco Energy sets 240-ton samarium metal capacity in Vietnam for pilot runs in Dec. 2026 - Lynas supplies oxide feedstock under reciprocal 30 billion won convertible bond pact - Pentagon bans Chinese rare earth materials in defense hardware from Jan. 1, 2027 ![Workers in hard hats observe operating industrial furnaces inside the specialized samarium metal facility in Vietnam. (AI-generated image)](https://eastasiabrief.com/media/2026-11-06-0a450c480da4.webp) *Workers in hard hats observe operating industrial furnaces inside the specialized samarium metal facility in Vietnam. (AI-generated image)* LS Eco Energy finalized operational preparations Nov. 6, 2026 for a 240-ton samarium metal plant in Vietnam, establishing an independent non-Chinese feedstock corridor ahead of tightened United States defense procurement rules. The Seoul-based company, a wire and energy materials subsidiary of LS Cable & System, invested 11.6 billion won ($8.4 million) to build the specialized metallization facility in Ho Chi Minh City. The plant will produce 240 metric tons of samarium metal annually. That volume provides sufficient input to manufacture between 700 and 1,000 metric tons of finished samarium-cobalt permanent magnets each year. Samarium-cobalt magnets retain stable magnetic properties at temperatures exceeding 300 degrees Celsius. That thermal tolerance makes them indispensable for missile steering fins, radar actuators, electronic warfare pods and military jet engines. Commercial demand for non-Chinese samarium stems directly from regulatory shifts in Washington. The United States Department of Defense will bar Chinese-origin rare earth materials from military hardware starting Jan. 1, 2027. The updated defense procurement rule expands restrictions past final magnet assembly to include upstream mining, separation and metal refining. Prime contractors face mandatory compliance across all tier-one weapon systems. China currently controls roughly 91% of worldwide rare earth refining capacity. That concentration leaves Western missile programs and aerospace contractors exposed to sudden export licensing curbs. LS Eco Energy established a dedicated joint venture named GLOBAL SHRE METAL in Ho Chi Minh City to execute the reduction and refining operations. The company holds a 58% equity stake in the entity. Regulatory filings show LS Eco Energy subscribed for 21,139,872 shares of the operating entity in cash. The transaction formally settles on Nov. 13, 2026. Unprocessed rare earth feedstocks will come directly from Australia. Australian producer Lynas Rare Earths entered into a strategic supply agreement with the LS Group to provide separated samarium oxides. The partnership rests on reciprocal convertible bond investments totaling 30 billion won ($22 million) exchanged between the two companies on July 27, 2026. Lynas operates the sole major commercial rare earth separation refinery outside China. The purified samarium oxide will ship from Lynas facilities to the LSCV plant site in southern Vietnam. The factory converts the chemical compound into pure metallic samarium through high-temperature electrolysis. Downstream magnet manufacturing connects directly into domestic industrial programs in South Korea. Korea Motion Works, a magnet manufacturing subsidiary of LS Cable & System, will process the metal into finished magnet blocks. Korea Motion Works signed an investment agreement Oct. 29, 2026 with the City of Gumi and North Gyeongsang Province to invest 350 billion won ($261 million) in a new factory. The planned Gumi plant targets an annual capacity exceeding 1,000 metric tons of permanent magnets. That volume represents roughly 17% of South Korea's total domestic rare earth magnet consumption. Construction on the Gumi fabrication plant begins in the first half of 2027, the company said. Commercial mass production will start in the second half of 2028. The company will initially produce neodymium-iron-boron magnets for electric vehicle drivetrains and industrial robots before scaling military-grade samarium-cobalt output. Physical metal production begins next month. Pilot operations at the Ho Chi Minh City facility start in December 2026. The regulatory filings do not disclose the exact pricing formula agreed with Lynas, and the company has not published binding long-term sales contracts with Western defense contractors. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | Pentagon defense rare earth rule | LS Eco Energy starts 240-ton samarium line, Korea Motion Works invests 350 billion won | Excluded from US defense magnet supply chain, loses SmCo defense revenue | Shin-Etsu faces non-China feedstock competition in Western military contracts | Aerospace prime contractors secure verified compliant SmCo supply ahead of Jan. 2027 | ## In this story - **Companies:** LS Eco Energy, LS Cable & System, Lynas Rare Earths - **Tickers:** 229640.KS, 006260.KS, LYC.AX - **Exposed:** Korea Motion Works - **Policy:** Procurement Rules - **Impact:** Supply Chain, Compliance, Capex ## Primary sources 1. newstomato.com 2. bloter.net 3. snmnews.com 4. lscns.co.kr 5. specialtimes.co.kr --- Cite as: East Asia Brief, "LS Eco Energy readies 240-ton Vietnam plant for defense samarium," November 7, 2026. https://eastasiabrief.com/semiconductors/ls-eco-energy-readies-240-ton-vietnam-plant-defense-1201