POSCO International's headquarters in Songdo, Incheon / Courtesy of POSCO International

POSCO International signed contracts worth around 1.16 trillion won ($885 million) to supply rare earth permanent magnets to carmakers in North America and Europe, the trading and energy arm of POSCO Group said, Tuesday.

The company also emphasized the permanent magnets will be manufactured using raw materials sourced from the United States, Australia and Vietnam, not China, highlighting its efforts to establish an independent supply chain breaking away from China's monopoly in the rare earths market.

POSCO International said its U.S. subsidiary recently secured a contract to supply about 900 billion won worth of permanent magnets to a global carmaker in North America, with deliveries scheduled from 2026 to 2031.

The company added that the supplied permanent magnets are expected to be installed in the drive motors of the company's new medium-sized to large electric vehicles (EVs).

Furthermore, the company's German subsidiary signed a contract to supply about 260 billion won worth of permanent magnets to a premium European automotive brand from 2025 to 2034.

The production of the permanent magnets will be handled by Star Group, the only Korean manufacturer of rare earth permanent magnets.

"This order is particularly meaningful as it represents the entry of domestic companies into the global market through collaboration, in a market essentially monopolized by China," a company spokesperson said.

"The company is currently in discussions for additional orders with several carmakers and motor manufacturers, and we are expecting good news for future business expansion."