Why U.S. Government Is Betting KRW 2.5 Trillion on Korea Zinc

[Korea Financial Times, Shin Haeju] As the U.S. government prioritizes strategic industry supply chain self-sufficiency and actively pursues direct equity investments in private companies, it plans to invest KRW 2.5 trillion, a huge amount, in Korea Zinc. This is interpreted as a move containing a strong will to go beyond past methods of attracting companies with subsidies and incorporate allied nations' core technologies entirely into its own security system.

Korea Zinc will invest a total of KRW 11 trillion to build a 'U.S. Smelter' in Clarksville, Tennessee. This is a mega project with approximately KRW 10 trillion (USD 6.6 billion) invested in facility investment (Capex) alone.

The U.S. government will invest a total of USD 2.36 billion (approximately KRW 2.46 trillion) in this project. Specifically, the U.S. Department of War and investors will provide USD 2.15 billion (approximately KRW 3.2 trillion), and the Department of Commerce will provide USD 210 million (approximately KRW 310 billion) under the CHIPS Act. The U.S. government will secure 'Preferred Access' to critical minerals produced by Korea Zinc.
The key to this investment is that it combines equity investment beyond simple subsidies. From the U.S. perspective, which must actively utilize economically allied companies to build comprehensive supply chains, Korea Zinc is analyzed to have been selected as the optimal partner.

U.S. Commerce Secretary Howard Lutnick highly evaluated the strategic value of this investment. He emphasized, "Korea Zinc's U.S. investment is a transformational deal that will change the critical minerals landscape," and "Through this, the U.S. can produce 13 types of critical strategic minerals on a large scale that are essential for national security, including aerospace, defense, semiconductors, and automobiles."

Over the past six months, the U.S. government has invested over USD 10 billion (approximately KRW 14.7 trillion) to secure equity and warrants in companies in critical minerals, IT, and energy sectors, including U.S. Steel, Intel, MP Materials, Trilogy Metals, and Westinghouse.

This is a preemptive response to the increasingly severe 'resource weaponization' risk. Currently, the U.S. import dependency for zinc reaches 73%, and self-sufficiency in major critical minerals such as antimony (85%), bismuth (89%), and gallium (100%) is also vulnerable.

The reason the U.S. chose Korea Zinc is clear. Not only does Korea Zinc possess world-class smelting technology and production capabilities, but it is already producing 12 of the 60 critical minerals selected by the U.S. (antimony, bismuth, cobalt, copper, indium, lead, nickel, silver, tellurium, zinc). When gallium and germanium are added by 2028, a total of 14 types can be supplied.

Korea Zinc is also expected to maximize its influence in the U.S. market through this investment. As supply shortages intensify due to local aging smelter closures and environmental regulations, Korea Zinc's complex smelter is expected to become a key base absorbing U.S. demand.

The industry views this investment as an opportunity for Korea-U.S. economic partnership to become even stronger. An industry official evaluated it as "a representative exemplary case symbolizing the economic security alliance between Korea and the U.S. beyond private company investment."

Shin Haeju (hjs0509@fntimes.com)