Korea Zinc's (010130.KS) planned smelter construction in the United States is expected to strengthen the Korea-US resource security alliance, with both countries' commerce ministers expressing strong support for the project.
US Commerce Secretary Howard Lutnick called the project "a groundbreaking deal that changes the landscape of America's critical minerals," according to industry sources on Tuesday. Korean Trade, Industry and Energy Minister Kim Jung-kwan also voiced support, saying the project "will help Korea establish a stable rare mineral supply chain."
Kim added that the government "views positively the strategic decision despite the financial burden," noting that "the US Commerce Department actively welcomes this investment project, and utilizing the fund for US investment will be discussed with the US Commerce Department during the specific investment process."
Democratic Party of Korea floor leader Kim Byung-ki also weighed in Tuesday, stating that "securing core supply chains in the US is progressing rapidly across strategic materials including automobiles, semiconductors, batteries, and smelter construction," adding that "the National Assembly must act responsibly for our economy and future generations."
The ministers' endorsement reflects Korea Zinc's rising status as a key player in the de-China supply chain, with its Tennessee smelter positioned to become a hub for advanced industrial materials. The facility in Clarksville, Tennessee will produce major non-ferrous metals including zinc, lead, and copper, as well as strategic minerals such as precious metals, antimony, germanium, and gallium.
Building an integrated smelter in the US is expected to solidify Korea Zinc's position as a core company in the de-China supply chain. As a company with US government investment that produces rare minerals China has weaponized, it could be considered a US security asset.
Korea Zinc previously announced plans to invest a total of 10.95 trillion won to build the smelter in Tennessee, producing non-ferrous metals and rare minerals including antimony and germanium, in partnership with the US government and others.
The US government and local investors will directly participate by contributing $1.94 billion (approximately 2.86 trillion won) alongside Korea Zinc to establish a joint venture called Crucible JV.
Korea Zinc's share of the capital contribution is $89.99 million (approximately 132 billion won), with the US side providing the majority of the remaining amount. The largest shareholder of the JV will be the US Department of War (Defense), which will hold a 40.1% stake.
The JV's capital contribution will flow to Korea Zinc through a third-party allotment capital increase, with the JV acquiring newly issued shares. Korea Zinc will invest $7.432 billion (approximately 10.99 trillion won) in the smelter construction by combining the capital contribution with US policy finance loans, financial investor loans, and US Commerce Department subsidies.
