Energy
Korea Zinc Targets $2B Loan for US Mineral Plant
Korea Zinc is raising $2 billion in commercial loans for its $7.4 billion critical minerals plant in Clarksville, Tennessee, the first new zinc refinery in the US since the 1970s. The project already has a $4.7 billion US government loan and $210 million in grants behind it. The Pentagon holds a 40% stake in the joint venture running the project and owns roughly 10% of Korea Zinc itself. The plant will produce 540,000 tonnes of metals a year. Construction starts in 2027 with the first output expected in 2029.
Korea Zinc is seeking $2 billion from banks to pay for its $7.4 billion Tennessee minerals plant. This is the first New zinc facility in America in 50 years amid America’s efforts to reduce reliance on China for key minerals.
Key Highlights
- Korea Zinc is seeking $2 billion of new loans for its Tennessee minerals plant.
- Overall, the project costs $7.4 billion, most of it funded by the US government.
- The plant will produce zinc, copper, lead, rare earths and chip-making acid.
- The US Pentagon will own a 40% interest in the joint venture that controls the project.
- China curtailed critical minerals exports to the U.S. in 2024, this plant is America’s response
Korea Zinc Turns to Banks Seeking $2 Billion More
Korea Zinc is negotiating with banks to receive new loans worth $2 billion, in relation to its plant based in Clarksville, Tennessee. The US government has already committed $4.7 billion through a defence loan and an additional $210 million as a grant. And this $2 billion is in addition to all that. The total cost for the project is $7.4 billion.
What the Plant Will Make
The Clarksville site is being developed on an old zinc smelter that has been in operation there since 1978. Korea Zinc acquired it from a company named Nyrstar and will expand it into something much larger.
When operational, it will create 540,000 tonnes a year of materials. That includes zinc, lead, copper, rare earth minerals and semiconductor-grade sulfuric acid, a compound that is used in chip factories as part of their production lines. They go into military hardware, electric vehicles, AI servers and aircraft.
The U.S. Government Is Taking An Equity Stake, Not Just Lending
The US is not giving out loans for free. It purchased new shares valued at $1.9 billion in Korea Zinc, giving Washington approximately 10% ownership of the company itself. The joint venture created to manage the Tennessee plant is owned 40% by the Pentagon. JPMorgan advised Korea Zinc on the transaction and is also among the investors.
Why China Pushed America Into This
The US is not producing enough minerals on its own and has been purchasing them from China for years. In December 2024, Beijing sanctioned exports of key minerals such as gallium and germanium to the US after Washington restricted some Chinese chips. That left America exposed.
This plant is a direct answer to that. This plan will bring 750 jobs and is one of the largest investments in Tennessee’s history. The site prep begins in 2026, construction will start in 2027, and the initial production will start in 2029.
FAQs
- How much is Korea Zinc raising with banks?
About $2 billion, in addition to the already promised $4.7 billion from the US government.
- At the plant that is under construction?
At the site of Nyrstar’s former zinc smelter in Clarksville, Tenn.
- Why does the US government own part of Korea Zinc?
It invested $1.9 billion for about 10 per cent ownership to gain direct access to supplies of minerals through Korea Zinc’s extensive global network.
- When does production start?
Construction starts in 2027, and first production by 2029.
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