Korea Zinc to build $7.4B smelter in Tennessee in rare partnership with Washington

Home > Business > Industry

Korea Zinc to build $7.4B smelter in Tennessee in rare partnership with Washington

Published: 15 Dec. 2025, 18:55 Updated: 02 Jan. 2026, 18:15

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Korea Zinc Chairman Choi Yun-birm speaks at a press conference on Nov. 13, 2024, in central Seoul. [YONHAP]

Korea Zinc will invest $7.4 billion to build a smelting facility in Tennessee, in a move under which the U.S. government itself will take the unusual step of investing directly in a foreign private company.

Aimed at a shared goal of reducing reliance on China, the world’s largest zinc smelter approved the plan at a board meeting on Monday, positioning the project as the first tangible case of cooperation between Korea and the United States following their tariff deal.

Under the plan, Korea Zinc and Washington will establish a joint venture, Crucible JV, valued at $1.9 billion.

While the specific U.S. government entities participating in the project and precise details have not been formally disclosed, the U.S. Department of War will inject $760 million to become the largest shareholder with 40 percent.

Other U.S. participants reportedly include the Department of Commerce, U.S. private defense firms and a U.S. defense-oriented strategic enterprise.

For the funds, Korea Zinc on Monday approved a 2.85 trillion won ($1.9 billion) third-party allotment capital increase, with all newly issued shares to be allocated to Crucible JV. If completed as planned, the U.S. government would ultimately hold a roughly 10 percent stake in Korea Zinc through the joint venture.

Up to $4.7 billion will be raised through loans backed by the U.S. government and financial investors. An additional $210 million will come in the form of subsidies from the Department of Commerce, which plans to acquire a corresponding equity stake in the joint venture.

The remaining $585 million will be funded by Korea Zinc.

The project will proceed with the acquisition of Nyrstar’s existing smelter site in Clarksville, Tennessee, which will be redeveloped to rebuild core infrastructure.

From left, Industry Minister Kim Jung-kwan, Korea Zinc Chairman Choi Yun-beom, Michael Williamson, president of Lockheed Martin International, and Howard Lutnick, U.S. Secretary of Commerce, take a commemorative photo during a signing ceremony for germanium supply and procurement held in Washington on Aug. 25. [KOREA ZINC]

Once operational, the facility is expected to produce 13 products, including key nonferrous metals such as zinc, lead and copper; precious metals such as gold and silver; strategic minerals including antimony, germanium and gallium; as well as sulfuric acid used in chip manufacturing.

Construction is scheduled to begin in 2027, with completion targeted for 2029. Annual production goals include 300,000 tons of zinc, 200,000 tons of lead, 35,000 tons of copper and 5,100 tons of rare and strategic metals.

“The investment reflects the growing need to establish additional production sites to address expanding global supply-chain risks and rising U.S. demand for nonferrous and strategic minerals, while securing stable and sustainable profit opportunities by positioning itself for long-term growth in the North American market,” Korea Zinc said in a regulatory filing.

“With the United States pursuing the restructuring of critical mineral supply chains as a national strategy, we reviewed the project at the request of the U.S. government.”

The agreement appears to have been forged out of Washington’s desperate reality when it comes to critical minerals. Rare earths are indispensable to every key industry, from semiconductors to defense and aerospace, yet the global market is overwhelmingly dominated by China.

Dependence on China exceeds 70 percent for some materials like antimony and bismuth, which those essential to the manufacture of artillery shells and missiles.

The United States has sought to rebuild domestic supply chains, but the smelting ecosystem has largely collapsed, hobbled by stringent environmental regulations and persistent challenges to commercial viability. Making things worse, China in October announced stricter export controls on rare earths.

Korea Zinc is the world’s largest zinc smelter, accounting for around 10 percent of the world’s zinc production. The company produces around 1.2 million tons of around 10 types of nonferrous metals including zinc, lead and copper.

Talks on the deal started in August, during Chairman Choi Yun-birm’s visit to White House as part of the Korean presidential economic delegation.

Kospi-listed Korea Zinc shares jumped 4.9 percent to close at 1.6 million won on Monday.

Meanwhile, the recent deal with Washington is likely to usher in a new phase in the management control dispute between Korea Zinc and the Young Poong–MBK Partners alliance, as it significantly strengthens Chairman Choi’s hand.

BY SARAH CHEA [[email protected]]