@schmoove Nice find! The Koreans need to start walking the walk and ante up with some Dubbo funding before ASM direct further efforts towards other jursidictions! Translation below;
ASM, an Australian rare earth element mining development company, established the country's first rare earth element production corporation in Korea based on the active support of the Korean government, but it has been confirmed that domestic companies are turning a blind eye to it.On the other hand, leading overseas global automakers and permanent magnet-related companies in the United States and Europe are sending quick love calls to KSM Metals, and there is concern that the wait-and-see of domestic companies may lead to a weakening of supply chain competitiveness.According to the business community on the 8th, major domestic conglomerates have held ASM· It is reported that he held a meeting with KSM Metals and others to collaborate on rare earths. However, it is reported that most of them did not propose a specific collaboration model beyond "let's discuss the business model." The government has also made active moves, but companies are said to be reluctant to invest.
Participating companies include Hyundai Motor Company, SK On, Samsung SDI, POSCO International, LX International, and Koryo Zinc.Rare earth elements are a key raw material for permanent magnets in industrial motors, especially in electric motors for electric vehicles.
The slowdown in the global economy due to US interest rate hikes and the uncertainty in the raw material market due to the Russia-Ukraine war are among the factors that make people reluctant to invest in the rare earth element market, which is still in the growth stage. In addition, the high dependence on China for rare earth elements is also cited as a factor that makes the acquisition of new supply chains noticeable.
On the other hand, battery companies such as LG Energy Solution and SK On are actively investing in mines centered on lithium. In the case of batteries, it is said that profits and losses are guaranteed in the sense that global demand is more secure than rare earths, and it is possible to preempt a favorable position in price negotiations.Kim Taek-so, vice president of the Korea Institute of Production Technology, said, "Major conglomerates are also highly interested in rare earths, but the market size is not large, so there will be difficulties in calculating the investment scale at the value chain level."
On the other hand, overseas companies are eager to secure the supply chain of rare earth elements.For example, earlier this month, 'USA Rare Earth', a US permanent magnet manufacturer, signed an agreement with ASM to supply rare earth elements, and KSM Metal will supply rare earth elements to USA Rare Earth for five years from next year. At the end of last month, ASM, Australian mineral developer Blackstone Minerals, and Vietnamese rare earth element manufacturer VTRE signed an MOU for rare earth element mining in Vietnam, and in May, Noveon, a U.S. rare earth element and recycling company, signed a contract with AMS to supply rare earth elements.In addition, permanent magnet companies in the United States and Europe, as well as companies such as GM and Mercedes-Benz, are also said to be interested in equity investment and technology collaboration for the development of Australian mines.
The move by overseas companies is interpreted as part of the diversification of supply chains due to major countries such as the United States and Europe restricting the use of raw materials from China. The European Union (EU) also unveiled a draft of a critical raw materials law in June that aims to reduce the use of Chinese raw materials to less than 65% by 2030.Experts are concerned that if large domestic companies preempt the infrastructure of "rare earth element Korean factories" by foreign companies, the supply chain of raw materials in the mid- to long-term may become vulnerable. This is supported by the fact that the importance of diversifying the supply chain has been highlighted through the shortage of semiconductors for vehicles, as well as the supply shortage of magnesium and urea. In particular, in the case of rare earth elements, there is a high dependence on China, and the need to diversify the supply chain is emphasized by the fact that the United States and Europe are curbing the use of raw materials from China.KSM Metals is the Korean subsidiary of ASM, which is pursuing the development of rare earth element mines in the Dubbo region of Australia, and has established a production plant in Ochang with active support from the government and local bodies. The Dubbo mine in Australia is designed by Hyundai Engineering.
Lee Ho-keun, a professor of automotive engineering at Daedeok University, said, "After 2025, battery production may be higher than demand, making prices more competitive. "If sanctions against China, Iran, and Russia are tightened in connection with the U.S. IRA, etc., if they do not secure mines directly, domestic companies may suffer more damage than benefits in 2~3 years."
ASM Price at posting:
$1.42 Sentiment: Buy Disclosure: Held
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