Korea Zinc's Tennessee smelter emerges as potential target for $200 bil. US fund

Industry Minister Kim Jung-kwan explains the ministry’s key policy agenda for 2026 at Government Complex Sejong, Wednesday. Yonhap

Korea Zinc’s smelter construction project in Tennessee could be discussed as a potential candidate to tap a $200 billion fund dedicated to U.S.-bound investment, Minister of Trade, Industry and Resources Kim Jung-kwan said Wednesday.

Addressing market concerns that the 11 trillion won ($7.4 billion) project could place a heavy financial burden on the world’s largest zinc smelter, Kim said he views the decision “positively” from his standpoint as the minister overseeing critical minerals, despite the costs involved.

“The project has been strongly welcomed by the U.S. Department of Commerce,” he said. “How the U.S. investment fund might be utilized will be a subject for further discussions with the department.”

He added, however, that discussions have not yet progressed to that stage, stressing that the matter remains at a preliminary level.

Last month, Seoul signed a memorandum of understanding with Washington on U.S.-bound investment, under which Korea plans to establish a $200 billion fund to support commercially viable projects in the United States.

Kim’s remarks are interpreted as indicating that Korea Zinc’s Tennessee smelter project could be brought up in talks with U.S. officials as a possible investment option.

He made the comments during a press conference at Government Complex Sejong after presenting the ministry's work plan for next year to President Lee Jae Myung earlier in the day.

Korea Zinc's Onsan Refinery in Ulsan / Courtesy of Korea Zinc

Korea Zinc said Monday that it will form a joint venture with the U.S. government and companies to build a large-scale smelter in Tennessee as part of the Crucible Project.

The investment is estimated at around 10 trillion won, rising to about 11 trillion won when operating and financing costs are included, with the U.S. Department of Defense and other entities expected to contribute between 2 trillion won and 3 trillion won.

Once construction is completed in 2029, the facility will initially produce zinc, lead and copper, before expanding into strategic minerals such as antimony and germanium.

Referring to the project, Kim noted that a consensus had already been reached in August through a memorandum of understanding.

“The facility is expected to help establish more stable supply chains for rare earths and critical minerals, benefiting both Korea Zinc and Korea as a whole,” he said.