The state-run Export-Import Bank of Korea, or Eximbank, on Friday signed a business agreement with the nation's leading cable manufacturer, LS Cable & System, and its Asia-focused subsidiary, LS Eco Energy, to support building a stable supply chain for rare-earth permanent magnets, a key component for electric vehicles and turbines.

Under the agreement, the three parties will share business information related to rare-earth permanent magnets and other electric drive system projects and enhance their cooperation to stabilize the supply chain of critical components.

Eximbank, in particular, plans to review funding for LS Cable’s initiative to establish a value chain for rare-earth permanent magnets.

Rare-earth permanent magnets, which are made from alloys containing elements like neodymium, have a magnetic force approximately 5 to 12 times greater than conventional magnets. They are essential components for driving motors used in EVs and wind turbines.

LS Cable and its affiliates are currently investing some 700 billion won ($528 million) to ramp up the production of rare-earth alloys and build a new permanent magnet production facility through a joint venture with overseas partners.

"We anticipate that this agreement will lay the groundwork for internalizing supply chains and enhancing the global competitiveness of Korean companies in high-tech industries," Eximbank Chairman and CEO Yoon Hee-sung said at the signing ceremony.

"Moving forward, Eximbank will continue to explore various support measures to strengthen our economy's resilience to supply chain crises in alignment with government policies."

Meanwhile, Eximbank will support Korean companies in stabilizing their supply chains, contributing to economic security, through a new supply chain stabilization fund, which is set to launch in the third quarter of this year. Established under the Framework Act on Supply Chain enacted in December 2023, the fund will be supported by government-guaranteed bonds, with financial resources expected to reach up to 5 trillion won this year.