In a move that is shaking up the global metals industry and the geopolitics of critical minerals, Korea Zinc has announced a landmark $7.43 billion investment to build an integrated nonferrous metal smelter in Tennessee. The decision, finalized at a board meeting on December 15, 2025, marks the largest overseas investment in the company’s history and signals a new era of U.S.-South Korea industrial cooperation amid mounting tensions with China over mineral supply chains.
According to Yonhap News and corroborated by the Maeil Business Newspaper, Korea Zinc will not be starting from scratch. Instead, the company will take over the existing Nyrstar Tennessee Smelter site, allowing them to fast-track construction and begin commercial operations in stages as early as 2027. The final completion is targeted for the end of 2029. The new facility will be a powerhouse, producing 13 types of metals, including 11 key strategic minerals such as antimony and germanium—both of which have been subject to Chinese export controls since October 2025.
The timing couldn’t be more critical. As China tightens its grip on rare earths and other essential minerals, the United States has been scrambling to secure alternative sources. The Korea Zinc project is seen as a direct response to these export curbs. U.S. Commerce Secretary Howard Rutnick was unequivocal in his assessment, stating, “It is a transformational deal that changes the U.S. core mineral market. The U.S. will have 'priority buying authority' for some of the expansion of Korea Zinc production.”
The business structure behind this project is as unconventional as it is ambitious. Korea Zinc will set up a joint venture, Crucible JV LLC, with the U.S. government and local investors. The initial financing plan is complex but calculated: Korea Zinc will contribute $1.94 billion through a third-party paid-in capital increase, while U.S. policy financing and financial investor loans will supply up to $4.698 billion. The U.S. Department of Commerce is also stepping in with $210 million in direct subsidies. Remarkably, Korea Zinc’s own funding accounts for just $585 million—less than 10% of the total project cost.
This unusual arrangement means the U.S. side isn’t just a partner—it becomes a major shareholder and, in the words of the Maeil Business Newspaper, a “fate community” with Korea Zinc. The deal is seen as so strategic that, with funds from both the U.S. Department of Defense and Commerce flowing in, Korea Zinc is being elevated from a private foreign company to what some are calling a “security asset of the United States.”
But there’s another layer to this story: the internal power struggle within Korea Zinc. Chairman Choi Yoon-beom, who has been locked in a management dispute with MBK Partners and Youngpoong, is widely seen as using this massive investment as a “strategic winning move.” The logic is clear—by bringing the U.S. government on board and making Korea Zinc indispensable to American supply chains, Choi is not only defending his leadership but also making it politically and economically risky for his rivals to oppose him. As the Maeil Business Newspaper puts it, “For the MBK and Youngpoong alliance, antagonizing the 'company invested by the U.S.' will result in a defeat with the U.S. government, and supporting it seems to be acknowledging Chairman Choi's contribution.”
The upcoming regular general shareholders’ meeting in March 2026 will be pivotal. The structure of the joint venture and the third-party capital increase will dilute the stakes of MBK and Youngpoong, potentially tipping the balance in the voting competition that will decide whether Choi is re-elected as in-house director. However, the final outcome may hinge on a court decision. There’s legal precedent for courts to block new share issues intended solely to defend management control, as seen in the Kakao-SM Entertainment dispute. Last year, Choi’s leadership took a hit when he was forced to withdraw a public offering that was seen as excessive.
On the international stage, this investment is part of a broader push by both Washington and Seoul to secure critical mineral supply chains. According to SocialNews.XYZ and IANS, the U.S. government actively advocated for the plant and is expected to invest around 2 trillion won alongside U.S. defense firms. The site was selected after reviewing 60 candidate locations across the southeastern United States, underscoring how strategic and competitive the process has been.
This isn’t Korea Zinc’s first foray into strategic partnerships with the U.S. Back in August 2025, following a summit between South Korean President Lee Jae Myung and U.S. President Donald Trump, Chairman Choi announced plans for a metals partnership with the U.S. During that visit, Korea Zinc also signed a memorandum of understanding with U.S. defense giant Lockheed Martin to invest approximately 140 billion won in a germanium-producing facility in South Korea. That initiative, while smaller in scale, laid the groundwork for the much larger Tennessee project.
Meanwhile, South Korea is also looking beyond the U.S. to strengthen its position in the rare metals arena. As reported by Yonhap and IANS, Seoul is launching a rare metals cooperation center in Mongolia this week. The center, part of South Korea’s official development assistance to Mongolia, will focus on studying valuable rare earth metals such as tungsten, molybdenum, and lithium. It will also provide technical training in processing and refining, aiming to help Mongolia add value to its significant reserves. This move is designed to diversify supply chains and reduce dependency on China, which has long dominated the rare earth market.
For the United States, the Korea Zinc deal is a coup. Not only does it create a new domestic source for critical minerals, but it also gives Washington a direct stake in the supply chain—something that has eluded U.S. policymakers for years. The priority buying authority granted to the U.S. government ensures that American industry, especially defense and high-tech sectors, will have access to the metals they need, even as global competition intensifies.
For Korea Zinc and Chairman Choi, the stakes are equally high. The Tennessee smelter project is a bold bet, both on the company’s technological prowess and on the shifting sands of international politics. If successful, it will cement Korea Zinc’s role as a linchpin in the new “de-China” supply chain and could secure Choi’s leadership for years to come. But with legal, financial, and political hurdles still ahead, the outcome is far from certain.
As the world watches the unfolding drama—from the boardrooms of Seoul to the corridors of Washington and the mineral-rich steppes of Mongolia—one thing is clear: the race for critical minerals is only heating up, and Korea Zinc’s Tennessee gamble may well define the next chapter.
