Korean media said that the rare earth magnet manufacturing enterprise "Star Group" built a factory in Dacheng County, Daegu

Korean media koreajoongangdaily reported that manufacturers are transferring production back to South Korea because they face disruptions and higher costs overseas.

Domestic market capacity is becoming a major asset.

According to the report, the rare earth magnet manufacturing enterprise "Star Group" has started to build a factory in Dacheng County, Daegu since November.

Kongquansheng, CEO of star group, said, "70% of the project has been completed and will be completed in July."

The company began production in Shangqiu, Henan Province, China in 1999. China's rare earth production accounts for 70% of the world's total production, where costs are reduced and procurement simplified.

Rare earth magnets are the key components of electric vehicle engines. 90% of the rare earth magnets used in South Korea are imported from China.

Due to the uncertainty of COVID-19 and the trade and technological war between China and the United States in China, Star Group relocated its processing facilities to South Korea.

"In order to create a stable production environment, we have decided to process raw materials in South Korea," he said. "We are purchasing rare earths from Australia."

When the new production facilities are operating at full capacity, Star Group plans to gradually cut off contact with China from the supply of raw materials.