Korea Zinc to Build $7.4 Billion Critical Minerals Refinery in Tennessee With U.S. Government Backing

Korea Zinc announced plans to invest $7.4 billion to build a large-scale critical minerals refinery in Tennessee, marking the first new U.S.-based zinc refinery since the 1970s. The project, heavily backed by the U.S. government, is designed to reduce America’s dependence on China for key minerals used in electronics, semiconductors, and military equipment, while strengthening domestic supply chains.

The new refinery will be constructed in Clarksville, Tennessee, after Korea Zinc acquires an existing facility from Trafigura-owned Nyrstar. The current plant will be demolished and replaced with a larger, more advanced complex scheduled to open in 2029. Once fully operational, the facility is expected to produce up to 540,000 metric tons of critical minerals annually, including zinc, copper, lead, and rare earth elements, making it one of the most significant mineral refining investments in the United States.

Funding for the project will come primarily from Washington. Korea Zinc plans to raise $1.9 billion through a share sale to a joint venture controlled by the U.S. government and U.S.-based strategic investors. The U.S. Department of Defense will reportedly hold a 40% stake in the venture, while Korea Zinc’s direct ownership will remain below 10%. Additional financing includes $4.7 billion in loans from the U.S. government and financial institutions, along with $210 million in subsidies from the Commerce Department under the CHIPS and Science Act.

The investment aligns with broader U.S. efforts to secure critical mineral supplies amid rising geopolitical tensions and recent export restrictions from China. The refinery will also restart a nearby zinc mine to supply raw materials and is expected to create around 420 high-paying jobs, with a focus on hiring U.S. military veterans.

While the announcement boosted Korea Zinc’s share price, the plan has faced opposition from major shareholders in South Korea, who argue it could entrench current management. Despite internal disputes, the project underscores deepening U.S.–South Korea economic ties and Washington’s push to rebuild domestic industrial capacity in strategic sectors.