Korea Zinc’s board is set to debate a bold proposal that could significantly alter the company’s strategic trajectory and deepen its ties with the United States. The plan centers on building a 10 trillion won ($6.8 billion) smelter in the U.S. through a joint venture involving the U.S. government and American companies, positioning the world’s largest zinc smelter at the heart of Washington’s drive to reduce dependence on Chinese-controlled critical minerals. The announcement has already reverberated through markets and boardrooms alike, highlighting the intersection of geopolitics, industrial policy, and corporate governance.

A Strategic Bet on U.S. Critical Minerals Policy

The proposed smelter would refine zinc, antimony, germanium, and other strategically sensitive minerals that are essential for semiconductors, telecommunications equipment, and military technologies. These materials have become focal points in the escalating economic rivalry between the U.S. and China, particularly after Beijing imposed export restrictions on several critical minerals last year in response to U.S. curbs on China’s chip sector.

By aligning with Washington, Korea Zinc would effectively embed itself within the U.S. critical minerals supply chain. Reports suggest the U.S. government and defense-related companies could invest around 1 trillion won in the project, while also taking a 10% equity stake in Korea Zinc itself. Such a move would be highly unusual, as direct U.S. government ownership in a foreign industrial company is rare, underscoring the strategic importance attached to the project.

Market Reaction Signals Strategic Appeal

Investors reacted swiftly to the news, sending Korea Zinc shares up 11% in Monday morning trading. The rally reflects optimism that the venture could secure long-term demand, political backing, and pricing power in an increasingly fragmented global metals market. For markets, the plan signals Korea Zinc’s intent to pivot from being primarily a refiner to becoming a geopolitical supplier of choice in the West’s industrial strategy.

At the same time, the scale of the investment—largely expected to be funded through borrowings—raises questions about balance-sheet risk and execution. While the U.S. partnership may lower demand risk, leverage and construction complexity introduce financial uncertainty that investors will continue to price in.

Governance Battle Intensifies

Beyond strategy and markets, the proposal has inflamed an already tense governance dispute. Young Poong Group and private equity firm MBK Partners, which together control roughly 41% of Korea Zinc’s voting rights, have sharply criticized the plan. They argue the deal is less about long-term value creation and more about securing a “white knight” to help Chairman Yun B. Choi retain control after their failed attempt earlier this year to overhaul the board.

This framing turns the smelter project into a proxy battle over corporate control. For shareholders, the concern is whether strategic alignment with the U.S. government enhances independence and value, or entrenches existing management at the expense of broader shareholder influence.

Global Implications and What Comes Next

If approved, the venture would mark a significant step in reshaping global critical minerals flows, potentially reducing Western exposure to Chinese supply dominance. It would also deepen industrial ties between South Korea and the United States at a time of heightened geopolitical alignment.

Investors will now watch the board’s decision closely, alongside funding details, governance concessions, and the reaction from U.S. regulators. The project’s fate will signal whether Korea Zinc can balance geopolitical opportunity with shareholder trust, and whether strategic minerals can become a bridge—or a battleground—between corporate ambition and global policy.