The U.S. Defense Department has announced a significant $7.4 billion investment in a new mineral smelting and processing facility in Tennessee, partnering with Korea Zinc. The deal gives the Pentagon a 40% stake in the venture, aimed at enhancing domestic supply chains for critical minerals, including zinc, which is vital for military equipment and advanced manufacturing.
Once operational, the facility is expected to process up to 540,000 tons of materials annually. This project marks a major shift as the U.S. seeks to reduce dependence on China for essential materials used in semiconductors and other technologies. Korean Zinc will issue approximately $1.9 billion in new shares to the joint venture, enabling the U.S. access to its global production.
Korea Zinc’s stock surged by over 26% following the announcement, reflecting the market’s recognition of the deal’s significance despite subsequent fluctuations due to shareholder concerns about dilution. The project aligns with broader national security strategies to invest in key assets and reduce reliance on foreign supply chains.
