The National Pension Service and POSCO will acquire 5 percent stakes in a Brazilian producer of a rare earth metal used in steel, oil pipes and automotive components, they said on Thursday.

They will each invest 400 billion won ($356 million) to acquire 5 percent of Brazil’s Companhia Brasileira de Metalurgia e Mineracao, the world’s largest producer of the scarce mineral niobium.

CBMM controls the largest deposit of niobium-containing mineral found on earth accounting for 87 percent of global output. Niobium is used to increase durability and strength in a wide range of products.

Along with the Korean consortium, a group of four Japanese companies will acquire a 10 percent-stake in the Brazilian firm. They are Nippon Steel Corp., JFE Holdings Inc., Sojitz Corp. and the state-owned Japan Oil, Gas and Metals National Corp.

The Korean and Japanese consortiums are set to sign an agreement to collaborate in the venture on Friday.

The move comes at a time when the Korean government is pushing to reduce its dependence on rare metals from China, which has been exerting increasingly tighter control on its exports.

In 2009, China exported 50,000 metric tons of rare metals but cut the figure to 30,000 tons last year.

Such changes in China’s policies continue this year, causing widespread concern for a shortage of rare metals.

As such, the Korean government has been seeking new sources for rare metals, and to increase the country’s rare metal reserves to 1,200 tons by 2016 from the current 3 tons.

By Choi He-suk (cheesuk@heraldcorp.com)