Korea Zinc Secures USA’s Backing for $6.8B Modern Refinery to Process Critial Minerals in Tennessee
As part of the US scramble to diversify sources of #CriticalMinerals, Washington has given the green light to Korea Zinc (KRX: 010130) to acquire the Nyrstar refinery and surrounding mines near Clarksville, Tennessee, at a valuation estimated at USD 6.8 billion. On Monday, 15 December 2025, Korea Zinc — the world’s largest zinc refiner — announced that it is forming a Joint Venture (JV) with the US Government and other unnamed American investors for this deal.
Under the plan, Korea Zinc will issue and sell shares to American public and private investors worth USD 1.9 billion. The US Government will extend another loan of USD 4.7 billion for the Tennessee project, as well as USD 210 million in grants from the US Commerce Department under the #CHIPSAct and Science Act.
Other major shareholders include the Young Poong conglomerate and private equity firm MBK Partners, which together hold about 50% of Korea Zinc. But the transaction will dilute their interest to about 30%, and these large shareholders have already expressed their opposition to the deal.
“Starting in 2026, the United States will have priority access to Korea Zinc’s expanded global production, putting #AmericaFirst in terms of security and manufacturing.”
US Commerce Secretary Howard Lutnick
In particular, the US War Department (previously the Defense Department) will hold 40% in the JV. The American group of investors will get a 10% stake. Korea Zinc Chairman Choi Yun-beaom will retain management control, while the US will get priority access to Korea Zinc’s production.
The Tennessee project will involve the tearing down of the old refinery and the building of a new one that can process both Base Metals and Critical Minerals. The new refinery is targeted for commercial operation by 2029. Then, the annual production is expected to reach 540,000 tonnes, including 300,000 tonnes of zinc, 35,000 tonnes of copper, 200,000 tonnes of lead, and 5,100 tonnes of #CriticalMinerals.
Two critical minerals — gallium (#Ga) and germanium (#Ge) — that are key for the semiconductor industry are on the radar and will be extracted from the residue and as a by-product of zinc refining. Korea Zinc’s new smelter is forecasted to output 30 tonnes of germanium and 40 tonnes of gallium annually.
Currently, China accounts for 98% of gallium production worldwide and 60% of refined germanium. In 2022, China exported 94 tonnes of gallium and 44 tonnes of germanium.
The State of Tennessee approved a property tax abatement for the project. The smelter is located near a major US military base and is expected to recruit veterans as part of its recruitment program.
The part is part of the deal cut by US President Donald Trump with South Korean President LEE Jae-myung when they met on the sidelines of the APEC Summit 2025 in South Korea last October. At that time, the US agreed to reduce tariffs on South Korea in return for South Korea investing USD 350 billion in the US.
The stock market appears to welcome the deal as the stock price of Korea Zinc jumped as high as 26%, before closing 4.9% percent higher following the announcement on Monday. The acquisition is expected to close by mid-2026, subject to regulatory approval from both the American and Korean sides.