JPMorgan, US Backing Korea Zinc’s $7.4 Billion Tennessee Smelter

Core Viewpoint - Korea Zinc Co. is set to invest approximately $7.4 billion in a new smelter in the US, supported by the American government and other investors, to enhance the supply of critical materials for industries such as chip-making, defense, and aerospace [1]. Group 1: Investment and Funding - The establishment of a foreign joint venture named Crucible JV LLC has been approved by Korea Zinc's board, with $1.94 billion of the funding sourced from the US government, strategic investors, and Korea Zinc itself [2]. - JPMorgan Chase & Co. acted as an adviser to Korea Zinc on this public-private partnership and assisted in financing the transaction through its Security and Resiliency Initiative, which aims to invest $1.5 trillion into industries that enhance economic security over the next decade [5]. Group 2: Strategic Importance - Korea Zinc is recognized as a strategic player in the US and its allies' efforts to secure supply chains for critical minerals, especially in light of geopolitical tensions and supply chain vulnerabilities [1][6]. - The new smelting facility will be capable of refining various metals, including zinc, lead, copper, gold, silver, and strategic minerals like antimony, germanium, and gallium, which are essential for advanced technologies [3][4]. Group 3: Market Context - The US currently has only one primary zinc smelter operated by Nyrstar USA, which is being sold to Korea Zinc, allowing the latter to develop a state-of-the-art facility on the site [3]. - The geopolitical landscape, particularly the recent export bans imposed by China on strategic minerals, has heightened the importance of securing non-China supplies, creating opportunities for refiners like Korea Zinc [4][6].