Sungan is showing strength. Concerns are growing that China will once again control rare earth exports, which appears to be affecting stock prices.
At 9:57 a.m. on the 1st, Sungan was trading at 2,350 won, up 5.62% from the previous day.
From the 19th to the 21st, the Group of Seven (G7) summit was held in Hiroshima, Japan. After the G7 summit, the United States and its allies moved to strengthen economic security to reduce dependence on China in advanced industries. The participating countries agreed to strengthen resilient supply chains through global partnerships for critical minerals, semiconductors, batteries, and other essential materials. As a result, there is analysis that China could use rare earth export controls as a card.
China is expanding the scope of rare earth export controls and strengthening its monopoly position related to rare earths. Since starting rare earth export controls in 2001, China recently revised its regulations for the third time to include rare earth magnet manufacturing technology as a subject of export control. The overseas transfer of rare earth magnet manufacturing technology made from neodymium (Nd) and samarium-cobalt (SmCo) has become difficult. Given the accelerating pace of China’s rare earth controls, concerns have arisen about a potential motor production crisis. If China halts exports of rare earth magnets, Western manufacturers such as automobile companies will inevitably suffer a fatal blow. China is the only country with an ecosystem that completes everything domestically from mining to refining, alloying, and motor manufacturing.
Sungan will begin producing neodymium-praseodymium (NdPr) metal prototypes this month at its factory in Binh Duong Province, Vietnam. A company official said, "We have received a major term sheet to supply raw materials from a leading U.S. rare earth mining company," adding, "After quality testing, large-scale supply contracts will proceed in the future." Due to the characteristics of rare earth metal processing, the large-scale power required for operation will be supplied with 3,000KW of electricity from the Binh Duong Power Authority.
Sungan will appoint a new board of directors to lead its rare earth business at an extraordinary general meeting on the 8th of next month. Kenji Konishi, a candidate for inside director, previously served as vice president and head of technology at JLMAG, one of China’s leading rare earth companies. Candidate for outside director Woo Sang-mo is a metallurgical engineering expert with experience at POSCO M-Tech and LS Nikko Copper.
A company official said, "The new board members possess the technology necessary for developing rare earth products for electric vehicle motors," adding, "It is highly significant to carry out the business by producing rare earth products for motors needed in electric vehicles, wind turbines, and high-performance electronic devices, by sourcing NdPr metal raw materials from Western countries outside China."
The Korea International Trade Association recently stated, "There is a risk of disruption in the localization of permanent magnet supply chains being promoted by countries including South Korea, the United States, and Europe, so caution is needed," and emphasized, "Efforts should be made to enhance domestic competitiveness in rare earths and permanent magnets, which are essential materials for future advanced industries, and to mitigate rare earth procurement risks through cooperation with major countries."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
