Korea Zinc Launches $7.4 Billion US Plant to Strengthen Critical Minerals Independence

The Trump administration is backing a transformative $7.4 billion minerals processing facility that Korea Zinc will establish within the United States. This strategic move addresses growing vulnerabilities in the supply chain for essential metals required across automotive manufacturing, military applications, semiconductor production, and virtually every advanced technology sector—with a clear focus on reducing reliance on Beijing.

Korea Zinc, recognized globally as the world’s leading zinc smelting enterprise, confirmed that Washington initiated direct outreach regarding this critical initiative. The company will construct a facility capable of processing antimony, germanium, gallium, alongside traditional metals including zinc, lead, copper, gold, and silver. Given the importance of these materials in electronics and semiconductor fabrication, the US administration has prioritized sourcing from jurisdictions outside China. The company stated that initial commercial production will commence incrementally beginning between 2027 and 2029, with full operational capacity reached by 2029.

The announcement triggered an immediate market response, with Korea Zinc’s stock surging 27% following media disclosure of the partnership, demonstrating investor confidence in this scale of government-backed initiative.

Strategic Investment Framework and Joint Venture Structure

This development emerged following South Korea’s $350 billion commitment to US investment, formalized through a tariff agreement executed in October. Korea Zinc’s leadership, including chair Choi Yun-birm, participated in a Seoul-based business delegation that met with Washington officials in August. The arrangement now constitutes one of South Korea’s most substantial commitments to developing critical minerals capacity on American soil.

The company’s board authorized a foreign joint venture structure and confirmed that the US government will serve as a direct equity participant. Capital requirements total approximately $2 billion in joint venture equity, with additional funding sourced through US government lending programs, federal grants, and Korea Zinc’s direct capital contribution.

Korea Zinc stated: “This venture will solidify our strategic positioning within the US critical minerals ecosystem and enhance operational competitiveness. The investment strengthens long-term value creation for both the corporation and shareholders by establishing sustainable growth foundations.”

The strategic framework targets integration into the US supply chain through acquisition and comprehensive redevelopment of Tennessee’s former Nyrstar smelting complex, enabling production of thirteen metals plus industrial-grade sulphuric acid for semiconductor applications.

Production Capacity and Supply Chain Impact

The facility will deliver substantial annual output upon reaching full operations: 300,000 tonnes of zinc, 35,000 tonnes of copper, 200,000 tonnes of lead, and 5,100 tonnes of rare earth elements. These production volumes represent among the most significant efforts to date in establishing non-Chinese sources for critical mineral materials.

Current global supply chains demonstrate heavy dependence on Chinese production for most critical minerals, particularly antimony, indium, tellurium, cadmium, and germanium—metals where Korea Zinc maintains existing processing capabilities. The gold price in South Korea and other regional markets reflects broader concerns about supply chain concentration, making initiatives like this facility strategically important for price stability and supply security across East Asia and allied economies.

Recent policy shifts, including China’s announcement regarding general licenses for rare earth exports negotiated through the trade truce, underscore the competitive pressure driving this US-Korea partnership toward accelerated development and execution.