Posco International said on May 22 it would build a rare earth separation and refining facility in the US through a joint venture with ReElement Technologies, The Korea Herald reports.

The trading and energy arm of Posco Group signed the agreement with ReElement in Washington on May 21 to establish the joint venture.

The signing ceremony was attended by Posco International chief executive Lee Kye-in, ReElement chief executive Mark Jensen and senior officials from the US State Department, Commerce Department and Energy Department, alongside representatives from the South Korean embassy in Washington.

Under the agreement, the two companies will jointly invest $200mn to build a rare earth separation and refining plant in the US with annual production capacity of 6,000 tonnes. They also plan to establish an integrated production complex for permanent magnets.

Posco International will lead management of the joint venture as the largest shareholder, while ReElement will provide core rare earth refining and separation technology.

The venture will produce neodymium-praseodymium oxide, a key material used in permanent magnets, alongside heavy rare earth oxides including dysprosium and terbium.

Operations will begin with annual capacity of 3,000 tonnes before expanding to 6,000 tonnes in a later phase. Pilot production is scheduled for the fourth quarter of 2027, with full commercial production expected in 2028.

The $200mn investment will be split evenly across two phases. The initial $100mn will fund construction, equipment installation and operating expenses, while the remaining $100mn has been allocated for future expansion depending on market conditions.

The agreement formally launches the “Boiler Maker Project”, a rare earth and permanent magnet production initiative first outlined in a memorandum of understanding signed by the two companies in September last year.