SEONG-AN’s Team of Experts Grabs Attention: Leading the Way for New Rare Earth Permanent Magnet Value Chain

5 Jan 2024

The Bell 2023.08.18 08:12:24

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The industry's attention is focused on the personnel composition of 'SEONG-AN', which selected rare earth permanent magnet manufacturing as a new growth engine in the existing textile industry. This is because, after the major shareholder changed in August of last year, the best experts in the industry have gathered one after another under SEONG-AN's umbrella, and the blueprint for the new business is becoming clearer. CEO Jun Young Lee and Kenji Konishi were appointed in June, and especially Vice President Kenji Konishi (CTO) is considered as the key man for the technology of their new business.

According to the industry on the 17th, SEONG-AN recently signed a contract to supply 240 tons of NdPr oxide with MP Materials, a major U.S. rare earth metal (NdPr) mining and oxide company, and decided to receive the initial quantity. SEONG-AN plans to secure additional quantities through follow-up discussions with MP Materials and expand investment in completing its own rare earth value chain, including expanding metallization plant in Vietnam and other places. SEONG-AN also announced plans to begin construction of a permanent magnet plant in Daegu within this year and complete it at the end of next year.

Permanent magnets, commonly called sintered magnets, are made by smelting and processing Neodymium (Nd) and Praseodymium (Pr) concentrates, which are light rare earth elements. It has excellent magnetism and the property of maintaining magnetism (coercivity), so it is used in electric vehicles, various home appliances, medical equipment such as MRI, elevators, and wind turbines. However, Chinese companies occupy more than 80% of the market, and China is strengthening its resource control policy due to the US-China trade conflict, so each country is considering internalizing the value chain. The same goes for the United States.

SEONG-AN strategically responds to evolving international dynamics, contemplating entry into the permanent magnet market since the second half of last year. While acknowledging the relatively small profit margins in metallizing, SEONG-AN envisions reinforcing collaborative ties with prospective Western clients through its oxide refining venture—a crucial precursor to permanent magnet production. This strategic move not only enhances sales volume but also sets the stage for future expansion into NdPr permanent magnet manufacturing, promising increased value addition.

The permanent magnet value chain is roughly divided into five stages. The structure consists of △ Producing rare earth ores, △Separating and refining the ores, processing them into oxides, △ Refining the oxides (metal processing), △Producing applied products, and △Supplying them to end users. In short, it is a process of mining raw materials from a mine, refining them, processing them into metal, making them into products (magnets), and selling them to consumers. Among these, SEONG-AN plans to enter the metal processing and applied products (permanent magnet manufacturing) field, which can generate cash flow relatively quickly.

This end, SEONG-AN recruited top experts in the field this year. The global rare earth networking business is accelerating with the appointment of CEO Jun Young Lee along with Dong Hoon Seong, CEO of the new major shareholder (Daeho Technology), as their respective representatives in June.

From The Ohio State University, CEO Jun Y. Lee began working in charge of international finance in the international department of Hyundai Investment & Securities, and served as director of Simplex Capital (Simplex Capital & Simplex Asset Management) in Hong Kong and Vice President of Global Strategy at Harex InfoTech, making him an expert in global business. Harex InfoTech is an AI tech company that announced the world's first mobile card payment service in Silicon Valley in 2000.

Mr. Lee is currently focusing on communication with MP Materials, which will be the core of raw material sourcing. MP Materials, a New York Stock Exchange (NYSE) listed company, currently operates the Mountain Pass Mine, the only rare earth mine and oxide facility in the United States. CEO Lee is doing his best to strengthen the supply and demand network of NdPr Oxide (oxide-treated concentrate) through continuous consultation with Michael Rosenthal, COO (Chief Operating Officer) of MP Materials.

In the technical side, Vice President Kenji Konishi plays a central role. Mr. Konishi is a key expert in the field of permanent magnet manufacturing, having served as Managing Director of JLMAG Rare Earths in Ganzhou, China, and CEO of Minmetals Santoku (Ganzhou) Rare Earth Material. Within the industry, he is recognized as a pivotal figure credited with elevating JLMAG, previously ranked in the top 20 in China in terms of sales, to a prominent industry leader.

In addition, Honorary Chairman Yoo Chul Kim, who advises on the overall rare earth business, and Nonexecutive Director Dr. Sang Mo Woo, an authority on rare earth separation, are also considered key technical advisors. In the case of Director Dr. Woo, he is a top tier person who earned a Doctorate in Metallurgical Engineering from Seoul National University and served as head of the Chemical Smelting Research Department at the LS Nikko Smelting Technology Research Institute and Managing Director of POSCO M- Tech.

SEONG-AN plans to accelerate high-spec permanent magnet production as soon as the rare earth oxide supply line gets stabilized. Once this is completed, the process of securing raw materials, undergoing metallizing in Vietnam, and producing permanent magnets at a domestic plant will be completed. The target market is permanent magnets for electric vehicle (EV) drive motors. This is because high-specification magnets (N-45UH, N-48UH, 52UH, etc.) with high heat resistance and strong magnetism have high value and demand is continuously increasing.

An official from SEONG-AN stated, "High -specification permanent magnets contain expensive heavy rare earth elements (Dy, Tb), and we have the technology to minimize this. We can be competitive in the value chain that is being reorganized around Western countries." He emphasized, “The business feasibility is sufficient because we can supply magnets for electronic devices, wind turbines, etc. with different specifications.”