Korea bids to build America's critical minerals capacity with $7.4bn investment

Korea Zinc’s decision to invest about $7.4 billion in a US smelting operation marks one of the most ambitious attempts yet to rebuild American capacity in critical minerals processing, a segment of the supply chain long dominated by China.

The South Korean group, the world’s largest zinc smelter, said its board had approved the creation of a foreign joint venture, Crucible JV LLC, to develop a large-scale facility in the US. Around $1.94 billion of the funding will come from the venture itself, backed by the US government, strategic investors and Korea Zinc. The remainder is expected to be financed separately.

At the heart of the plan is the proposed acquisition of Nyrstar USA’s smelter in Clarksville, Tennessee, currently the only primary zinc smelter operating in the country. Nyrstar, owned by Trafigura Group, said it had agreed to sell the plant to Korea Zinc for an undisclosed price. Korea Zinc intends to redevelop the site into what it described as a “new state-of-the-art fully integrated large-scale smelting facility”.

The facility is expected to process not only zinc but also lead, copper, gold and silver, alongside minerals such as antimony, germanium and gallium. These materials have taken on heightened strategic importance since China imposed export restrictions on them last year, following US curbs on advanced technology sales to Beijing. They are used in semiconductors, defence systems and aerospace equipment.

The project reflects Washington’s broader push to secure non-Chinese supply chains for critical minerals, a priority that has endured even as other industrial policies, such as electric vehicle incentives, have been scaled back. JPMorgan Chase advised Korea Zinc on the public-private partnership and helped arrange financing under its Security and Resiliency Initiative, according to a person familiar with the matter.

For Korea Zinc, the US expansion also comes against a backdrop of corporate turbulence. The company remains embroiled in a contested takeover bid led by its largest shareholder, Young Poong, and private equity firm MBK Partners. Young Poong has criticised the US project, arguing it serves management’s interests rather than shareholders’. Investors, however, reacted positively, sending Korea Zinc shares sharply higher on the day of the announcement.