Korean Proxy Fight Threatens to Derail Trump’s Big Zinc Bet

Core Viewpoint - The Trump administration's investment in a US zinc development has become entangled in a South Korean proxy fight, highlighting the challenges of government involvement in critical industries amid free-market backlash [1][5]. Group 1: Investment Details - The administration announced a joint venture with Korea Zinc to support a $7.4 billion smelter project in Tennessee aimed at increasing US production of critical minerals [2]. - The project is expected to more than double Korea Zinc's revenue and prioritize the US for crucial metals [9]. - The US government is contributing over $2 billion to the project, with involvement from the Commerce and Defense departments, and JPMorgan Chase & Co. is among the investors [10]. Group 2: Reactions and Legal Challenges - The reaction to the deal has been mixed, with shares fluctuating as Korea Zinc's largest shareholders express concerns about the deal structure [2]. - Activist investors Young Poong Corp. and MBK Partners Ltd. have filed an injunction in a South Korean court to halt a share issuance for the smelter, claiming it is an attempt to evade a proxy battle [3]. - The Trump administration is aware of the proxy fight but does not intend to intervene, viewing it as a routine corporate dispute [11]. Group 3: Implications for US Policy - The case could disrupt efforts to boost domestic production of critical minerals and complicate US-South Korea relations, which have already been strained by tariff issues [4]. - Critics argue that the administration's approach of taking direct stakes in critical mineral producers risks undermining its objectives by involving the government in business dealings [5]. - US officials remain cautiously optimistic about the deal's progression, believing it will revitalize domestic production in defense and aerospace sectors [7].