US to back Korea Zinc’s $7.4 billion critical minerals plant

Korea Zinc Co. plans to build a smelter in the US for about $7.4 billion, backed by the American government and other investors, to bolster supplies of materials essential for chip-making, defense and aerospace.

The firm, the world’s biggest smelter of the metal, is seen as a strategic player in efforts by the US and its allies to secure supply chains for critical minerals.

The decision to set up a foreign joint venture, called Crucible JV LLC, was approved by Korea Zinc’s board on Monday, the company said in a regulatory filing. Some $1.94 billion of the funding for the smelter will come from venture, consisting of the US government, strategic investors and Korea Zinc, it said.

The US has only one primary zinc smelter, which is operated by Nyrstar USA, a subsidiary of commodities trading house Trafigura Group. Nyrstar plans to sell that plant in Clarksville, Tennessee, to Korea Zinc for an undisclosed sum, according to a separate statement. Korea Zinc plans to develop a “new state-of-the-art fully integrated large-scale smelting facility,” on the site.

That facility will be capable of refining zinc, lead, copper, gold, and silver, as well as strategic minerals such as antimony, germanium, and gallium, Korea Zinc said. Last year, China imposed an export ban on these three strategic minerals, used in products ranging from semiconductors to satellites and night-vision goggles, in a tit-for-tat response to US technology restrictions on Beijing.

JPMorgan Chase & Co. was an adviser to Korea Zinc on its public-private partnership, according to a person familiar with the matter who asked not to be identified citing private details. In addition to advising on the deal, the bank helped finance the transaction under its new Security and Resiliency Initiative, a new push by the lender to funnel $1.5 trillion into industries that bolster economic security in the next 10 years.

Even under the Trump administration’s rollback of EV incentives, Washington’s priority on securing non-China supplies of critical minerals has strengthened, creating a strategic niche for refiners that can anchor US-backed supply chains.

By building US smelting and processing capacity and partnering with government and defense stakeholders, Korea Zinc is positioning itself as a national-security supplier, not just an EV-cycle player. The company’s maiden US venture is a bet that geopolitics, defense needs, and grid demand will outlast today’s EV slowdown.

The planned US push comes as Korea Zinc’s long-running ownership dispute continues to cast a shadow over the group. The battle for control was sparked last year after the company’s biggest shareholder, Young Poong Corp., and MBK Partners Ltd. launched an unsolicited takeover bid for the company.

Korea Zinc shares closed up 4.9% in Seoul on Monday after jumping as much as 26% earlier. Young Poong dropped 2.8%.

Young Poong said Korea Zinc should reconsider its US smelter plan, arguing the deal is intended to shore up chief executive’s Yun B. Choi management control rather than serve the company’s business interests.

(By Shinhye Kang and Hannah Levitt)