As of December 31st, 2025, Korea Zinc(KRX: 010130) has made a slight revision for its latest Tennessee smelter. The initial proposal consisted of $1.95 billion(2.85 trillion won) share issuance. With a small reduction in the planned share issuance, the funding now stands at $1.94 billion(2.833 trillion won).
This slight reduction is courtesy of the finalized share price and fluctuations in currency exchange rates. This capital for the share issuance is being raised through a third-party share issuance to Crucible JV, a joint venture controlled by the U.S. government and unnamed strategic investors. There is a significant implication to this joint venture, as the nature of the capital acquisition gives Crucible JV approximately a 10% ownership stake in Korea Zinc.
The $7.4 Billion Tennessee Smelter: A Strategic Hub
The proposed $1.94 billion funding is just one part of the whole project. A total of $7.4 billion in investment will be made in Clarksville, Tennessee, for reviving the US smelting industry. This smelting facility aims to produce a total of 13 metals. Special focus is applied to strategic metals like antimony, gallium, and germanium. These are considered strategic metals because they are a vital entity in the manufacture of mission-critical equipment systems such as aerospace, defence, semiconductors, and AI technologies.
The funding is of paramount importance since the facility is expected to reach full capacity by 2029. Once it reaches the said full capacity, the facility will be able to produce roughly 540,000 tons of materials annually. Beyond the 1.94 billion US dollars worth of share sales, the project is backed up by $4.7 billion in loans and $210 million in subsidies from the U.S. Commerce Department. This backing comes under the CHIPS and Science Act.
Reducing Global Reliance On China
This project is a personal favorite of the Washington administration as it is aimed at in-house material manufacturing, which will, in effect, reduce the present reliance on Chinese imports for strategic metals. With the US government backing the project, it has become clear that Korea Zinc will be able to enable the US to decouple from its current supply chain from China.
Since China is the dominant player in the export of strategic metals, it has become necessary for the US government to make an allied stance with the growing asian economy. In addition to this, the US president’s tariff war had cost the US dearly when China put a chokehold on the export of strategic metals. Even though the issue was resolved later through a friendly exchange between Shi Jinping and Donald Trump, the US government has realized that it is in dire need of a smelting facility within the country.
This strategic partnership gains momentum as the US Commerce Secretary Howard Lutnick stated that this was a big win for America. This deal becomes one of much strategic importance since it gives the US priority access to Korea Zinc’s production.
Legal Hurdles And Shareholder Injunctions
This deal unfolds amidst major drama in South Korea. Major shareholders MBK Partners and YoungPoong, who hold an approximate amount of combined 46% stake, tried to block this issuance. This matter was taken to court in South Korea after both shareholders filed an injunction request. However, the Seoul Central District Court rejected the injunction request on 24th December, 2025, by stating that the project had broader implications on the nation’s economic and security interests.
The opposition to the issuance, consisting of MBK Partners and YoungPoong, argued in court that Chairman Yun B. Choi of Korea Zinc was trying to dilute the voting powers of both parties in the opposition by strategically placing the US government as a “white knight.” This dispute exposed the ongoing internal battle inside Korea Zinc to assume control. This management battle had been raging since late 2024. Critics of the issuance still claim that the 10% share issuance at a discounted rate dilutes the share value of existing partners.
Outlook: Timeline For 2026 And Beyond
Criticism aside, this deal carries much weight for Korea Zinc as they are going to acquire existing U.S. assets from Nyrstar in Tennessee, a deal expected to close in the first half of 2026. As far as Americans are concerned, this deal is indeed a great win since it brings potential gains within the US. The deal is expected to create 750 American jobs and revitalize a U.S. smelting industry that has been in decline since the 1970s.
