Korea Zinc said the company's stature will rise with the "Clarksville, Tennessee integrated smelter project," which is based on a partnership with the U.S. government. It projected that incentives such as tax credits and tax benefits at both the federal and local government levels would maximize the project's profitability.
According to Korea Zinc on the 21st, various tax benefits and incentives provided by the U.S. federal government, the Tennessee State Governments, and others for the Clarksville integrated smelter project are estimated at 2.13 trillion won ($1.442 billion).
Under Section 45X of the Inflation Reduction Act (IRA), the U.S. government provides a tax credit of 10% of manufacturing expense for critical minerals produced in the United States. Korea Zinc said this would improve cost competitiveness.
In addition, through the bonus depreciation system applied to manufacturing facilities in the United States, large capital expenditure (CAPEX) can be expensed immediately, which is expected to sharply reduce the initial burden of taxes. This is under the U.S. OBBBA (One Big, Beautiful Bill Act).
A Korea Zinc official said, "The Clarksville integrated smelter project will create synergy by combining Korea Zinc's smelting technology capabilities and business know-how accumulated over more than 50 years with the U.S. government's policy and financial support," adding, "It will serve as an opportunity to elevate Korea Zinc's standing in the global critical minerals market."
Korea Zinc said the Clarksville integrated smelter project is closely linked to the U.S. government's policy of stabilizing the critical minerals supply chain. It added that by forming a strategic alliance with the U.S. government, it has solidified its status as a "trusted and reliable supplier." It created an opportunity to secure a structural competitive edge in areas such as signing long-term supply contracts and entering key national industries including defense.
Based on this partnership with the U.S. government, Korea Zinc plans to accelerate smelter construction and commercial operation by making full use of policy and permitting support.
Korea Zinc projected that the Clarksville integrated smelter will become a strategic production base that directly absorbs North American demand for critical minerals. Driven by growth in advanced industries such as electric vehicles, batteries, artificial intelligence (AI), semiconductors, and the defense industry, U.S. demand for critical minerals is gradually expanding.
According to the U.S. Geological Survey (USGS) and the International Energy Agency (IEA), U.S. demand for copper is expected to rise about 36% (650,000 tons) from 1.8 million tons in 2024 to 2.45 million tons in 2040, and zinc demand is projected to increase about 27% (220,000 tons) from 820,000 tons to 1.04 million tons over the same period. However, as of 2024, domestic U.S. supply stands at about 1 million tons for copper and about 220,000 tons for zinc.
A Korea Zinc official said, "By preoccupying the U.S. market, the world's largest demand center, we can supply critical minerals stably, strengthen our mid- to long-term growth engines, and improve our responsiveness to policy and regulatory changes," adding, "By keeping pace with the U.S. government's stance of treating critical minerals as national security assets, we can further enhance business stability."
Meanwhile, Korea Zinc said on the 15th that it decided to form a JV with the U.S. Department of Commerce, the Department of War (the former Ministry of National Defense), and defense strategy companies to build a nonferrous metal smelter in Clarksville, Tennessee. As one method of financing, Korea Zinc decided to make a third-party paid-in capital increase by contributing about 10.59% equity in the JV, in which the U.S. Department of War holds the largest stake (40.1%). In response, Young Poong, which is in a management dispute with Korea Zinc, filed for an injunction to prohibit the issuance of new shares, and the result is expected as early as on the 22nd.