Korea Zinc plunges over 13% as largest shareholder opposes plans for U.S. smelter
Piotr Swat | Light Rocket | Getty Images
Korean Zinc shares tumbled more than 13% on Tuesday as its largest shareholder reportedly opposed plans to form a US-backed joint venture that would dilute its equity stake in the South Korean company.
Shares of the world’s largest zinc smelter rose more than 26 percent on Monday following the announcement of a $7.4 billion mineral smelter project in Tennessee, before their gains fell to 5 percent.
The company’s largest shareholders’ association opposes the move and will seek a court order to stop the company from issuing new shares.
Korea Times The alliance, consisting of private equity firm MBK Partners and conglomerate YoongPoong, reportedly said the plan was designed to keep company Chairman Choi Yun-beom in management control.
According to the agreement, a joint venture company will be established to build the smelter in Tennessee, with the Pentagon holding a 40% stake in the joint venture.
Within the scope of the projectKorea Zinc will sell $1.9 billion worth of new shares to this joint venture, which is controlled by the US government and some unnamed US-based strategic investors, effectively giving the group a 10% stake in the South Korean company.
South Korean media outlet Business Korea said: The issuance of 10% of the new shares would reduce Yoong-Poong-MBK’s total stake from around 44% to the “high 30% range” while allowing Choi and the US government’s friendly holdings to rise to the 40% range.
Earlier Tuesday, US Commerce Secretary Howard Lutnick said in a post on X “Beginning in 2026, the United States will have priority access to expanded global production of Korean Zinc, putting American security and production FIRST.”
The Tennessee project aims to build an integrated smelter producing critical and strategic minerals as well as base metals, with phased commercial operations targeted for 2029, Korea Zinc said in a statement.
The planned critical mineral smelting and processing facility could produce 540,000 tons of the material annually in the United States, according to the U.S. Department of Commerce, and comes at a time when the United States is trying to establish critical mineral partnerships that are not dependent on China.
