Setopia Signs Joint Venture Agreement with Vietnamese Company 'VTRE'

Setopia, a KOSDAQ-listed company, announced on the 8th that it has signed a contract to establish a domestic joint venture (JV) with Vietnam Rare Earth JSC (hereinafter VTRE), a rare earth raw material company based in Vietnam, for the purpose of building a supply chain for the exclusive supply of rare earth oxides.

Based on this contract, the two companies will establish a JV in Chungcheongbuk-do, where there is significant interest and support for the creation of a domestic rare earth cluster. The JV will exclusively receive rare earth oxides (up to 1,500 tons annually) refined from rare earth ores (up to 6,000 tons annually) sourced from VTRE’s own mines and two local state-owned mines in Vietnam. The supplied rare earth oxides will be processed into metals or permanent magnet alloys and then sold to domestic and international buyers through the JV.

Setopia-VTRE Joint Venture Establishment Contract Signing Ceremony. From the left, Setopia CEO Seosangcheol, VTRE CEO Luu Anh Tuan. Photo by Setopia

Permanent magnets made from rare earth elements are essential components in various electronic devices, electric vehicles, and wind turbine generators. According to a rare earth-related report published by the Korea International Trade Association, 93% of permanent magnet synchronous motors (PMSM) used in electric vehicles worldwide already adopt rare earth permanent magnets. For example, one electric vehicle requires more than 10 kg of permanent magnets for the drive motor and various sensors.

In addition, Setopia has agreed with VTRE to establish an eco-friendly secondary refining technology plant in Chungcheongbuk-do after domestic environmental assessments. This plant will separate mixed oxides after the primary rare earth refining process, aiming to further solidify the supply chain of rare earth oxides in the post-China era.

VTRE is a company located in Phu Ly City, Ha Nam Province, Vietnam, possessing rare earth smelting technology. It owns its own rare earth mines and has received equity investment from state-owned mining companies. Recently, VTRE also signed a business agreement to establish a global rare earth supply chain with Chungcheongbuk-do, Australian ASM, and KSM Metals.

A Setopia official stated, “By signing a contract with VTRE, a leading company in Vietnam, which holds the world’s second-largest rare earth reserves after China, we have become the first domestic company to secure a continuous supply chain of rare earth oxides.” He added, “Through the establishment of the JV with VTRE in Chungcheongbuk-do, we will build a supply chain for rare earth oxides, an essential resource for future industries, and transform into a company with competitiveness in high value-added industries.”

Meanwhile, rare earth elements are widely used in renewable energy, electronic products, and electric vehicle parts, and are regarded as one of the important mineral resources utilized in future value industries. Recently, the decoupling of rare earth resources from China due to the US-China trade dispute has become a global issue attracting attention.