Korea Zinc's Strategic US Smelter and Its Impact on Shareholder Dynamics and Geopolitical Supply Chains

The global race for critical minerals has intensified in 2025, with Korea Zinc emerging as a pivotal player in reshaping supply chains to counter China's dominance. The company's proposed $6.8 billion U.S. smelter, coupled with its ongoing corporate governance battle, underscores the intersection of geopolitical strategy, corporate power, and investment risk. This analysis examines how Korea Zinc's U.S. expansion aligns with broader trends in mineral security while navigating internal shareholder conflicts that could redefine its long-term trajectory.

Strategic US Smelter: A Geopolitical and Industrial Gamble

Korea Zinc's U.S. smelter project, announced in late 2025, represents a bold move to secure a non-Chinese supply chain for critical minerals. The initiative involves a $6.8 billion investment, with U.S. stakeholders holding a 20% stake, and is designed to produce antimony, germanium, and other strategic materials essential for semiconductors, defense systems, and renewable energy technologies according to reports. This aligns with the company's broader "Troika Drive" strategy, which emphasizes renewable energy, secondary battery materials, and resource recycling as reported.

The project's timing is no coincidence. It follows a $85.2 million strategic investment in The Metals Company (TMC) in June 2025, granting Korea Zinc access to nodule-derived nickel, cobalt, and manganese while bypassing Chinese refining hubs. This vertical integration effort is part of a larger U.S.-South Korea collaboration to diversify supply chains, as highlighted in recent trade discussions. By anchoring production in the U.S., Korea Zinc positions itself as a key supplier for industries prioritizing resilience over cost efficiency-a shift accelerated by U.S. national security concerns according to analysis.

The project is emblematic of a global trend: the decoupling of critical mineral supply chains from China. The company's partnerships with Lockheed Martin and The Metals Company reflect a deliberate strategy to bypass Chinese refining and processing hubs, which currently dominate 60-80% of global refining capacity for materials like cobalt and rare earths according to industry analysis. By 2028, Korea Zinc aims to produce 15.5 metric tons of gallium and 10 tons of germanium annually at its Onsan smelter, further solidifying its role in this transition.

However, this strategy is not without risks. The U.S. smelter's success hinges on sustained political support, which could wane if the project fails to meet production targets or if U.S.-South Korea relations shift. Additionally, the company's financial commitments-including a 1.8 trillion won share buyback in October 2024- raise questions about its ability to fund both the smelter and its ongoing legal battles.

Investment Implications: Balancing Risk and Reward

For investors, Korea Zinc presents a high-stakes opportunity. The U.S. smelter, if operationalized, could generate substantial returns by capturing a growing share of the $500 billion critical minerals market according to market analysis. However, the ownership battle introduces volatility. A protracted legal dispute could delay the smelter's completion or force management to cede control, potentially undermining its strategic value.

The company's recent earnings-7.65 trillion won in the first half of 2025- suggest strong operational performance, but these gains must be weighed against regulatory risks. South Korea's Financial Supervisory Service and Fair Trade Commission are already investigating potential antitrust violations, and a regulatory backlash could erode investor confidence.

Conclusion: A Strategic Pivot in a Fractured Landscape

Korea Zinc's U.S. smelter is more than a corporate initiative; it is a geopolitical statement. By aligning with U.S. supply chain goals, the company has positioned itself as a critical player in the global transition away from Chinese dominance. Yet, its ability to realize this vision depends on resolving internal governance conflicts and maintaining political support. For investors, the key lies in monitoring the interplay between corporate strategy and geopolitical dynamics-a landscape where the stakes are as much about power as profit.