South Korean court clears Korea Zinc’s $7.4B US smelter plan
A South Korean court has rejected a request by major shareholders to block Korea Zinc’s plan to issue new shares to fund a $7.4 billion U.S. smelter, clearing the way for the project.
The ruling sent Korea Zinc shares up as much as 5%, while shares of YoungPoong, one of the opposing shareholders, fell over 10%, News.Az reports, citing Reuters.
The smelter in Tennessee will be largely funded by the U.S. government and aims to reduce reliance on China for critical minerals used in chips, electronics, and defense. Under the plan, a joint venture controlled by the U.S. government and strategic investors will acquire $1.9 billion worth of Korea Zinc shares, gaining roughly a 10% stake in the company.
“We will proceed with our U.S. smelter project and work to enhance corporate and shareholder value,” Korea Zinc said, emphasizing its role in strengthening South Korea’s economic security and the global critical minerals supply chain.
Private equity firm MBK Partners and conglomerate YoungPoong, which together hold about 46% of Korea Zinc, expressed concerns over potential shareholder dilution but said they would support the project to achieve “win-win” outcomes for all parties.
Experts note that the deal could strengthen the position of Korea Zinc Chairman Yun B. Choi, who has been in a battle for control of the company.
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