Korea Zinc to bolster U.S. strategic minerals supply chain

by · UPI

SEOUL, Dec. 16 (UPI) -- Non-ferrous metal giant Korea Zinc said it would spend billions of dollars to build a smelter of strategic materials in Clarksville, Tenn., in partnership with the U.S. government.

The Seoul-based company said it would collaborate with the U.S. Department of Commerce and the Department of Defense on a project valued at $7.4 billion, including working capital and financial costs.

Korea Zinc's U.S. subsidiary will establish a joint venture with the U.S. government to raise $1.94 billion in equity. The Department of Defense and investors will inject $2.15 billion, while the Department of Commerce will offer subsidies.

The remaining funds will be secured from direct investment from Korea Zinc and loans backed by U.S. policy financial programs and private lenders.

Related

As a result, the Department of Defense will receive a 40.1% stake in the project, according to a regulatory filing by Kora Zinc. But the company did not provide additional details.

Construction of the smelter is scheduled to begin in 2027 on a 160-acre site in Clarksville. It is expected to roll out 13 products beginning in 2029, including 11 types of critical minerals.

At full capacity, Korea Zinc aims to produce 300,000 tons of zinc annually, along with 200,000 tons of lead, 35,000 tons of copper and 5,100 tons of other materials like antimony, indium, bismuth, tellurium and gallium.

"Recently, the U.S. is experiencing rapid growth in demand for base metals such as zinc, lead and copper, as well as strategic minerals including antimony, indium, gallium and germanium, driven by advanced and strategic industries such as electric vehicles, batteries, AI and semiconductors," Korea Zinc said in a statement.

"However, with many domestic smelting facilities aging or closed, domestic supply is limited, leading to structural supply chain vulnerabilities that the United States is actively working to address. In fact, according to the U.S. Geological Survey, some critical minerals, such as indium and gallium, are currently 100% import-dependent," it added.

Against this backdrop, Korea Zinc said its planned U.S. facility could assist Washington's supply chain independence, reinforce economic security and enhance the U.S.-South cooperation.

Supply chain autonomy for critical minerals

The announcement comes at a time when the Trump administration has put forth efforts to build supply chains for rare earth elements and critical minerals independent of Chinese influence.

Rare earths and critical minerals are essential to the development of weapons systems, semiconductors and next-generation industries like electric vehicles and robotics.

China currently dominates global supply chains for many of these materials and has been accused of leveraging that position in trade disputes with the United States through tighter export controls.

"The new factory of Korea Zinc in Tennessee will be the first large-scale zinc smelter in the United States since the 1970s. What the Trump administration wants is to strengthen supply chain autonomy for rare earths and critical minerals," economic commentator Kim Kyeong-joon, formerly vice chairman at Deloitte Consulting Korea, told UPI.

"To that end, Washington appears to be proactively seeking trusted partners among its allies, including South Korea and Australia. This, in turn, would provide greater bargaining power in its trade standoff with China," he said.

The United States and Australia signed a deal in October to increase investment in rare earths and critical minerals. The total values of the projects are predicted to reach $8.5 billion.

For Korea Zinc, the Tennessee project is not its first attempt to secure critical mineral supply chains outside China. In August, the company signed a memorandum of understanding with U.S.-based Lockheed Martin to supply germanium.

Senior officials in the Trump administration welcomed the project.

"President Trump has directed his administration to prioritize critical minerals as essential to America's defense and economic security," Deputy Secretary of Defense Steve Feinberg was quoted as saying by Korea Zinc.

"The new smelter in Tennessee creates 750 American jobs to unlock strategic minerals as a force multiplier across aerospace, defense, electronics and advanced manufacturing without chokepoints," he said.

U.S. Sen. Bill Hagerty, R-Tenn., also hailed the U.S. investment.

"Korea Zinc's decision to build a world-class critical minerals refinery in our state is not just an economic victory -- it is a geostrategic one that directly supports President Trump's efforts to restore American economic security in partnership with trusted allies, like South Korea," he said in a social media post.

"This project will expand the United States' capacity to produce the minerals that power our advanced industries and defense capabilities, strengthening national security while delivering high-paying jobs for hundreds of Tennessee families," he said.

The share price of Korea Zinc rose 4.87% Monday, but fell 15.14% Tuesday on the Seoul bourse. The drop was related to a plan to issue new shares, seen as an attempt to thwart a takeover.