Korean conglomerate Posco launches $16m rare earths investment fund

Posco International, the global trading arm of Korean conglomerate and steelmaker Posco Group, has launched its inaugural KRW 25bn ($16.7m) VC fund to invest in rare earth minerals.

The fund has made its first investment, backing an unnamed Korean rare earth separation and refining specialist company, which Posco says has proprietary technology that can produce rare earth oxides at over 99% purity, to the tune of KRW 8bn ($5.3m).

The investment comes as Posco International also pushes into the North American market with a joint venture with US-based separation and refining company ReElement, through which they are building a facility with 3,000 tonne capacity, scheduled to begin production in the second half of next year.

It forms part of a strategy of securing rare earth supply for materials such as terbium and dysprosium – crucial in the manufacturing of EV motors – the production and refining of which are not typically done outside a few countries.

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The new fund will be managed by Posco Investment, the conglomerate’s VC and investment arm.

While this is Posco International’s first CVC fund, it is not the first in the wider group. Posco Capital was founded in 1997 to back domestic startups across a wide range of sectors. Posco Venture Capital – formerly known as Postech VC – was also founded the same year.

Posco’s recent startup investments include solid oxide electrolysis cell developer Enforus, edge AI technology developer Persona AI and solar power inverter producer Solarize.

See all funding rounds in the CVC Funding Round Database