This article was displayed on the ChosunBiz MoneyMove (MM) website at 4:03 p.m. on Jun. 22, 2026.
As the possibility emerges that Korea Zinc may pursue a large-scale integrated mineral processing facility in Australia similar to the U.S. "Project Crucible," attention is on whether the Australian government will join as a friendly shareholder for Chairman Choi Yoon-beom's side. Last year, Korea Zinc allocated 10.59% in voting new shares to a joint venture (JV) that included the U.S. government and strategic investors, and this was classified as friendly equity for Chairman Choi's side.
The National Reconstruction Fund Corporation (NRFC), Australia's state investment agency, said it has not signed any investment agreement with either Korea Zinc or its Australian subsidiary Sun Metals Corporation (SMC). It declined to answer whether it had conducted early-stage reviews or discussions. The industry says that if the Australian project is pursued by allocating Korea Zinc new shares to a JV as in the United States, friendly equity for the chairman's side could increase.
According to the investment banking (IB) industry on the 22nd, Townsville Enterprise, a regional economic development group in Queensland, Australia, recently unveiled a plan to build an integrated mineral processing facility in North Queensland centered on Korea Zinc's Australian subsidiary SMC.
The facility is an integrated mineral processing plant that smelts copper, zinc and lead in one place to produce 11 critical minerals and sulfuric acid. Townsville Enterprise cited Korea Zinc's integrated smelter project underway in Tennessee and introduced the Australian plan as "replicating the scale of the U.S. project in Australia."
SMC also publicly mentioned the feasibility of this project concept. Ron Lee, SMC chief executive officer (CEO), said there is an opportunity to build a world-class integrated mineral processing facility in North Queensland, and noted that, as in the U.S. project, it will need to work closely with the government.
The industry is watching whether Lee's remarks mean mere policy support and permitting cooperation, or whether they also include an investment and equity structure similar to the U.S. Crucible. With the management control dispute ongoing between Chairman Choi's side and the Young Poong–MBK Partners alliance, if the Australian government becomes a new friendly shareholder for the chairman, it could be a factor that reshapes the dispute.
The key is whether Australian government support will translate into actual investment. NRFC is a policy finance institution that manages Australian government funds and provides equity investments, loans and guarantees to strategic industries. It lists value-adding resource projects, including critical mineral processing, as a key investment area and has precedents of actual investments in rare earths and lithium projects in Australia.
In response to our query asking whether NRFC had discussed investment or financial support measures for the Australian project with Korea Zinc or SMC, and whether it had considered acquiring Korea Zinc voting new shares similar to the U.S. Crucible, it said, "We have not entered into an investment agreement with either Korea Zinc or SMC." It added, "We cannot comment on confidential or early-stage discussions," and said, "We will inform you again if there is anything further to disclose." While drawing a line at a finalized investment agreement, the response is not interpreted as ruling out contact with Korea Zinc or SMC, the possibility of investment review, or future financial support.
Last year, in the course of advancing the U.S. project, Korea Zinc established the Crucible JV, in which the U.S. government participated as the largest voting rights holder. The U.S. government, strategic investors and Korea Zinc contributed a total of $1.94 billion, and the Crucible JV acquired 2,209,716 Korea Zinc new shares via a third-party allotment to secure 10.59% equity.
The rights issue proceeds will flow through Korea Zinc into the U.S. Smelter project. Korea Zinc structured the project so that it would add its own funds to those procured from the Crucible JV and then contribute them to the U.S. smelter project entity.
The Crucible JV was not merely a financial investor. After stating its equity holding purpose as "management participation," it went on to recommend board candidates at Korea Zinc's regular shareholders meeting in Mar. this year.
The Young Poong–MBK Partners alliance has taken issue with this equity structure. It argues that, under the pretext of raising funds needed for a large overseas investment, issuing voting new shares to a third party diluted existing shareholders' equity and created a shareholder lineup favorable to the chairman.
Moreover, SMC, which is at the center of the Australian project, has a precedent of playing a key role in the Korea Zinc management control dispute. In Jan. last year, SMC acquired 10.33% equity in Young Poong previously held by Chairman Choi's family and others, and this was used to create a cross-shareholding structure that limited the voting rights of Korea Zinc shares held by Young Poong. The equity was later transferred to Sun Metals Holdings (SMH), SMC's parent company, via an in-kind dividend.
In Apr., the Korea Fair Trade Commission sent Korea Zinc an examination report and initiated sanction procedures. The issue is whether the acquisition of Young Poong equity using overseas affiliates constitutes an unlawful act to circumvent cross-shareholding restrictions. The final determination on illegality and the level of sanctions will be decided after deliberation by the Commission.