Youngpoong has been unable to process sulfuric acid, an essential byproduct generated during the zinc refining process at its Seokpo smelter in Bonghwa County, North Gyeongsang Province, through Korea Zinc. This follows the government's administrative action halting Korea Zinc's authority to handle sulfuric acid.
According to industry sources on the 13th, the Nakdong River Basin Environmental Office under the Ministry of Environment issued an administrative order for improvement to Korea Zinc's Onsan smelter at the end of last month, notifying that it is not allowed to store or manage sulfuric acid imported from a third party (Youngpoong). Consequently, Korea Zinc reportedly sent a letter to Youngpoong on the 6th, notifying that it can no longer accept sulfuric acid starting from the 11th.
Earlier, Korea Zinc received a prior notification of administrative action for violating the Chemical Substances Control Act from the Nakdong River Basin Environmental Office at the end of November last year. It was pointed out that the storage and handling of sulfuric acid received from Youngpoong's Seokpo smelter exceeds the scope of its business license.
In response to the prior notification, Korea Zinc submitted an opinion letter on December 12th last year; however, the environmental office ultimately issued an administrative order for improvement on December 31st. If Korea Zinc does not improve this situation by the 24th, administrative measures such as operational suspension may be taken against the Onsan smelter.
Currently, Youngpoong is in a state of emergency for sulfuric acid exports, and there are concerns that, in the worst-case scenario, zinc production could also become difficult. Youngpoong produces around 750,000 tons (t) of sulfuric acid annually, which is used in the manufacturing of fertilizers and chemical products; until now, it has relied on Korea Zinc for management and processing due to a lack of its own processing facilities.
In particular, the Youngpoong Seokpo smelter has accounted for over 30% of the domestic zinc supply. The smelter has already been unable to carry out any operational activities to produce zinc ingots by injecting zinc concentrate into the process for 58 days beginning February 26th due to issues such as illegal wastewater discharge. The factory's operating rate has fallen to around 50% based on the third quarter of last year.
An industry official noted, "Following the 58 days of operational suspension, with an additional 10 days of business closure and now the inability to handle sulfuric acid, the Seokpo smelter is expected to experience significant disruptions in operations and production."