Korea Zinc said the company's standing will rise further through 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 the U.S. federal and local government levels will maximize the project's profitability.
On the 21st, according to Korea Zinc, the various tax benefits and incentives that the U.S. federal government and the Tennessee State Governments will provide for the Clarksville integrated smelter project are estimated at a total of 2.13 trillion won ($1.442 billion).
Under Section 45X of the Inflation Reduction Act (IRA), the U.S. government provides a tax credit equal to 10% of the manufacturing expense for critical minerals produced in the United States. Korea Zinc said this will improve cost competitiveness.
In addition, through the bonus depreciation system applied to manufacturing facilities in the United States, large-scale capital expenditure (CAPEX) can be expensed immediately, which is expected to significantly reduce initial taxes. This is under the U.S. OBBBA ("one big, beautiful bill").
A Korea Zinc official said, "The Clarksville integrated smelter project will generate synergy as Korea Zinc's smelting technology capabilities and business know-how, accumulated for more than 50 years, combine with the U.S. government's policy and financial support," adding, "It will be an opportunity to elevate Korea Zinc's standing in the global critical minerals market by one step."
Korea Zinc said the Clarksville integrated smelter project is closely linked to the U.S. government's stance of stabilizing the critical minerals supply chain. It said it has solidified its status as a "trusted and reliable supplier" by forming a strategic partnership with the U.S. government. It has created an opportunity to secure a structural competitive edge in areas such as signing long-term supply contracts and advancing into national core 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. With the growth of advanced industries such as electric vehicles, batteries, artificial intelligence (AI), semiconductors, and defense, 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, while 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 mid- to long-term growth drivers, 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 will also be able to further enhance business stability."