As of 11:15 a.m., Korea Zinc shares were up 11.8 percent at 1,698,000 won, after touching an intraday high of 1,914,000 won, sharply outperforming the broader market as the KOSPI fell 1.4 percent.
Korea Zinc, the world's largest non-ferrous smelting company, is holding a board meeting and is expected to announce its decision later Monday following a vote by directors.
According to industry sources, the company is pursuing a joint venture in the United States, inviting the U.S. government and local companies as partners. Washington reportedly approached Korea Zinc as part of its efforts to secure strategic mineral supplies following China's move in October to weaponize rare-earth exports.
The plan has drawn strong opposition from Young Poong Group and MBK Partners, which are pursuing a hostile takeover of Korea Zinc. The two investors criticized the U.S. investment plan, arguing that it "goes against national interests by compromising the zinc business to defend Chairman Choi Yun Birm's personal management rights."
They warned that the project could hollow out South Korea's domestic smelting industry and heighten the risk of leaks involving core technologies.
Under the proposed structure, the U.S. Commerce and Defense Departments, along with American defense contractors, would invest about $690 million in the joint venture. If Korea Zinc issues new shares to the JV, the U.S. partners are expected to acquire roughly a 10 percent stake.
The remaining 7 trillion won ($4.74 billion) would be financed equally by the U.S. government and JPMorgan, through loans guaranteed by Korea Zinc, according to the sources.
If approved, the deal would position Korea Zinc as a key partner in Washington's push to build a rare-earth supply chain independent of China. Direct equity participation by the U.S. government in a Korean private company would mark the formal launch of a "strategic resources alliance" between Seoul and Washington aimed at countering China’s dominance in global rare-earth production.
Korea Zinc Chairman Choi Yun Birm was included in the business delegation accompanying President Lee Jae Myung during his state visit to the United States in August.
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