On Monday (December 15), Korea Zinc announced its plans to construct a smelting plant in the United States for the production of key metals and minerals. This $7.4 billion project will receive support from the U.S. government and other investors. The move comes as Washington seeks to reduce its reliance on China in critical minerals such as rare earths.
The world’s largest zinc refining company stated that the U.S. government requested the construction of these facilities to address the growing global supply chain risks and the increasing demand for non-ferrous metals and strategic minerals in the United States.
The new smelting plant, located in Clarksville, Tennessee, is planned to produce main non-ferrous metals such as zinc, lead, copper, precious metals like gold and silver, as well as strategic minerals including antimony, germanium, and gallium.
Last year, China imposed an export ban on the strategic minerals antimony, germanium, and gallium, which are widely used in products like semiconductors, satellites, and night vision goggles.
According to regulatory documents, the construction of the smelting plant is set to begin in 2027 with completion expected by the end of 2029, followed by commercial operation.
The project aims to strengthen the U.S.’s supply of critical materials needed in chip manufacturing, national defense, and aerospace sectors.
The smelting plant will operate through a joint venture. Korea Zinc stated in regulatory filings that its board approved the establishment of a foreign joint venture named Crucible JV LLC on Monday. The joint venture consists of the U.S. government, strategic investors, and Korea Zinc.
Korea Zinc indicated that the U.S. Department of Defense will hold a 40% stake in the joint venture, with Korea Zinc having less than 10%. Approximately $1.94 billion in funding for the smelting plant will come from the joint venture. The U.S. government and financial institutions will provide $4.7 billion in loans for the plant, with $210 million coming from the U.S. Department of Commerce under the CHIPS Act subsidy.
Following this announcement, Korea Zinc’s stock rose by 4.9% at the close of trading in Seoul on Monday, surging by 26% at one point during the session.
The U.S. government’s investment in the smelting plant is in response to China’s weaponization of critical minerals.
“With the intensification of the global trend of resource weaponization… the project is expected to strengthen economic and security cooperation between South Korea and the U.S., and make a significant contribution to diversifying the global supply chain,” Korea Zinc said in a statement.
(This article referenced reports from Reuters and Bloomberg.)