US-based Energy Fuels on Monday announced a partnership with South Korea's Posco International to create a non-China supply chain for rare earth elements (REE) essential to the production of high-performance permanent magnets used in electric vehicle (EV) drivetrains.

Posco is a key player in producing traction motor cores, which are integral to the drivetrains of electric and hybrid vehicles. The company is already a leading supplier to major automotive customers in the US, South Korea, Japan, and Europe, and its drivetrains have been qualified by top global automakers. 

The collaboration provides Energy Fuels with an opportunity to secure long-term sales agreements for its REE oxides, which could soon be used in vehicles across the US and Europe.

“Today's agreement between Energy Fuels and Posco International brings the US and our allies in Europe, South Korea, and Japan one step closer to seeing vehicles powered by American-made rare earth oxides with no ties to China, unlocking a scalable, high-quality allied REE magnet processing and manufacturing route that does not currently exist in the US. Energy Fuels is moving aggressively to address a critical gap in the domestic market that is both competitive and shielded from geopolitical factors," said president and CEO Mark Chalmers.

Energy Fuels has already provided initial qualification samples of its neodymium-praseodymium (NdPr) oxide, produced at its White Mesa mill in Utah. These samples have met Posco’s specifications. 

Under the newly signed memorandum of understanding (MoU), Energy Fuels will supply a larger-scale batch of NdPr oxide to Posco, which will be processed into NdPr metal, alloy, and high-performance magnets. These magnets will be tested for use in Posco’s traction motor cores. Successful validation could lead to a larger-scale supply of NdPr oxide for permanent magnet production, enough to power more than 30 000 EVs by the end of this year.

Following successful validation, Energy Fuels and Posco plan to discuss a long-term agreement for the supply of US-produced REE oxides, while also leaving room for other customers, including US-based metallisation, alloying, and magnet production initiatives.

Energy Fuels has made significant strides in commercial-scale production of high-purity, separated NdPr oxides. The company plans to scale production significantly using high-grade monazite feedstock from recent mine acquisitions and partnerships with US-allied nations. Monazite concentrates, which are a byproduct of heavy mineral sands projects, have high grades of REEs, including NdPr, dysprosium and terbium.

The MoU, while binding for the initial sample shipments and testing commitments, is non-binding regarding any future long-term agreements unless finalised by both parties.