Korea Zinc sinks 13% as largest shareholder group challenges U.S.-backed plans for Tennessee smelter

Korea Zinc shares plunged implicit 13% connected Tuesday, arsenic its largest shareholder is reportedly opposing plans to make a U.S.-backed associated task that volition spot a dilution of its equity involvement successful the South Korean company.

Shares of the world's largest zinc smelting institution had climbed implicit 26% connected Monday, earlier paring gains to 5%, arsenic it announced a $7.4 cardinal mineral smelter task successful Tennessee.

The company's largest shareholder confederation is opposing the determination and would question a tribunal injunction to halt the institution from issuing caller shares.

The Korea Times reported that the alliance, made up of backstage equity steadfast MBK Partners and conglomerate YoongPoong, said the program was designed for institution Chairman Choi Yun-beom to clasp connected to absorption control.

Under the deal, a associated task company volition beryllium acceptable up to physique the smelter successful Tennessee, with the Pentagon having a 40% involvement successful the JV.

As portion of the project, Korea Zinc volition merchantability caller shares worthy $1.9 cardinal to this associated task controlled by the U.S. authorities and definite U.S.-based strategical investors that person not been named, efficaciously giving the radical 10% involvement successful the South Korean company.

South Korean media outlet Business Korea said that issuing 10% of caller shares volition trim the combined Yoong-Poong-MBK involvement ratio from astir 44% to the "high 30% range" portion allowing affable stakes from Choi and the U.S. authorities to emergence to the 40% range.

Early Tuesday, U.S. Commerce Secretary Howard Lutnick said successful a station connected X that "Starting successful 2026, the United States volition person precedence entree to Korea Zinc's expanded planetary production, putting American information and manufacturing FIRST."

The Tennessee task seeks to physique an integrated smelter producing basal metals arsenic good arsenic captious and strategical minerals, with phased commercialized operations targeted for 2029, Korea Zinc said successful a statement.

The planned captious minerals smelting and processing installation could nutrient 540,000 tons of materials successful the U.S. per year, according to the U.S. Commerce Department, and comes arsenic the U.S. seeks to signifier captious mineral partnerships that are not babelike on China.