Korea Zinc’s plan to build US smelter would benefit South Korea, minister says

South Korea’s industry minister said on Wednesday that Korea Zinc’s plan to build a US smelter would help develop supply chains for critical minerals and added that Seoul could discuss whether the plan might receive support from a US investment fund.

Korea Zinc on Monday unveiled a plan to build a $7.4 billion critical minerals refinery in Tennessee that will be funded largely by Washington.

“We see it as a positive move for Korea Zinc to make this strategic decision despite the financial burden,” Industry Minister Kim Jung-kwan told a press conference.

“We concluded those plans from Korea Zinc will help the country build stable supply chains for rare earths,” Kim said.

He said he needed to discuss with the US whether Seoul’s $350 billion investment package in strategic US sectors, which was recently agreed under a trade deal, could be used to help fund the Korea Zinc project.

Two major shareholders of Korea Zinc asked a South Korean court this week to block the company’s plan to issue new shares.

Young Poong and private equity firm MBK Partners said they were not opposed to the construction of a US smelter per se, but objected to the proposed issuance of new shares worth $1.9 billion to a joint venture backed by the US government and unnamed US-based strategic investors that would give the investors 10% of Korea Zinc.

(By Heejin Kim and Hyunjoo Jin; Editing by Ed Davies)