Pentagon gets investment stake in Korea Zinc refinery in Tennessee
Water vapor and smoke rise from Korea Zinc Co.’s smelter in Ulsan, South Korea, Oct. 21, 2024.
Seong Joon Cho | Bloomberg | Getty Images
The Department of Defense is taking a 40% stake in a $7.4 billion mineral smelter to be built in partnership in Tennessee. Korea ZincReuters reported on Monday.
According to the U.S. Department of Commerce, smelting and processing of critical minerals can produce 540,000 tons of the material annually in the United States.
The deal comes as the United States seeks to establish critical mineral partnerships that are not dependent on China.
Korea Zinc will sell $1.9 billion worth of new shares to a joint venture controlled by the U.S. government and unnamed U.S.-based strategic investors, Reuters said. According to the news source, the government and investors will control 10% of Korean Zinc in this case.
“The United States has not built such a large-scale zinc smelter since the 1970s, a fact that reflects how decades of poor leadership have endangered our national and economic security,” White House spokesman Kush Desai told CNBC on Monday. he said.
“Thanks to President Trump, this is changing with Korea Zinc’s investment in Tennessee,” Desai said. “The Trump administration will continue to use every tool at our disposal to end America’s dependence on foreign resources for critical minerals and restore working-class prosperity.”
The Pentagon did not immediately respond to a request for comment.
“These minerals power the technologies most important to our future: defense systems, semiconductors, artificial intelligence, quantum computing, automobiles, data centers and advanced manufacturing,” the Commerce Department said in a statement. to post X on Monday.
The Commerce Department said that in addition to the smelter, the United States will have priority access to global production of Korean Zinc. The Post notes that the agreement “strengthens our national security, rebuilds our industrial base, and ends our dependence on foreign supply chains.”
The Korea Zinc deal follows an $8.5 billion “framework” agreement between the United States and Australia in October to increase rare earth and critical mineral investment between the two countries.
Rare earths are a type of critical mineral that can be used in the development of weapons, semiconductor manufacturing, robotics and electric vehicles. China currently dominates the rare earth supply chain.
The White House announced at the time that, as part of the agreement with Australia, the Pentagon agreed to invest in building a gallium refinery in Western Australia.
The Pentagon became the largest shareholder of rare earth miner MP Materials in July after agreeing to buy $400 million in preferred stock.
