SEOUL, December 19 (AJP) - Korea Zinc recently signed a strategic partnership with the U.S. Department of Defense and the U.S. Department of Commerce, agreeing to pursue a joint investment to build a large, integrated smelter in Tennessee.
The U.S. administration has increasingly treated critical minerals as strategic assets essential to national defense and economic security, elevating supply self-reliance and trusted supply chains to top policy priorities.
Against that backdrop, the agreement signals that Korea Zinc — an allied-country company with world-class technology and production capacity in nonferrous metal smelting — has been incorporated into the U.S. critical-minerals supply chain as a trusted partner.
The deal has the potential to serve as a model for South Korea–U.S. cooperation on economic security and supply chains, aligning with South Korea’s national interests while offering Korea Zinc a meaningful business opportunity.
The United States, a global hub for advanced and strategic industries such as semiconductors, batteries, electric vehicles, artificial intelligence, aerospace and defense, also has strong demand for base metals such as zinc and copper, as well as strategic minerals including antimony, indium, gallium and germanium.
For Korea Zinc, forming a joint venture with the U.S. government and jointly building a large-scale smelter in a market with sustained demand for strategic minerals represents an attractive opportunity — one that offers both operational stability and long-term profitability.
Media reports and corporate disclosures indicate that Korea Zinc, the U.S. Department of Defense and U.S. investors plan to establish a joint venture to carry out the investment and formalize a strategic partnership, with Korea Zinc issuing new shares to the venture.
Under South Korean law, such a transaction would constitute a third-party allotment of new shares. While the law generally protects existing shareholders’ preemptive rights, it also allows third-party allotments when a company’s articles of incorporation permit them and when there is a clear management purpose.
Given the strategic context of the investment and public statements from U.S. officials, there is little basis to question that the principal purpose of the proposed share issuance is to establish a durable partnership with the U.S. government and help build a U.S.-based critical-minerals supply chain. That clearly qualifies as a management purpose.
From a broader investment perspective, it is common in strategic alliances for joint projects to involve cross-shareholdings, whether through the transfer of existing shares or the issuance of new ones. Even in the midst of a management-control dispute, corporate executives retain a responsibility to pursue new businesses and invest when compelling opportunities arise.
Large-scale industrial projects require financing, and issuing new shares through a third-party allotment is a standard corporate tool and a matter of reasonable business judgment. It is unconvincing to argue that a company should be barred from issuing new shares solely because it is facing a control dispute, particularly when the transaction serves a clear strategic and commercial objective.
Indeed, if a board were to block decisions necessary to seize a valuable opportunity purely because of such a dispute, it could raise questions about a breach of directors’ duty of care.
As a citizen, I hope this joint investment with the U.S. government in the critical-minerals sector moves forward smoothly and sets a constructive precedent for future economic security cooperation.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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