Korea Zinc Shares Tumble As Shareholders Challenge US-Backed Tennessee Smelter Plan

Shares of Korea Zinc, one of the world’s largest zinc smelters, fell nearly 13 percent after the company’s largest shareholder group openly challenged plans for a U.S.-backed smelter project in Tennessee. The sharp decline reflects growing investor concerns over governance, capital allocation, and geopolitical risk tied to the ambitious overseas expansion.

The proposed Tennessee smelter, backed by U.S. strategic interests, is intended to strengthen domestic supply chains for critical minerals used in electric vehicles, renewable energy, and advanced manufacturing. The project has been positioned as part of a broader effort by the United States to reduce reliance on foreign processing of key industrial metals.

However, Korea Zinc’s biggest shareholder group raised strong objections, questioning the project’s cost, long-term profitability, and political risk exposure. In a public statement, the group argued that the Tennessee facility could place significant financial strain on the company at a time when global metals markets remain volatile.

Investors reacted swiftly, sending Korea Zinc shares sharply lower in Seoul trading. Market analysts said the sell-off was driven by fears of internal conflict, potential project delays, and uncertainty over whether management can secure broad shareholder support. Some warned that prolonged disputes could erode confidence in the company’s strategic direction.

The Tennessee smelter plan has also drawn attention due to its geopolitical significance. U.S. officials have promoted the project as part of efforts to rebuild domestic industrial capacity and secure supply chains for critical minerals. While such backing could provide long-term strategic benefits, critics say it also exposes Korea Zinc to political and regulatory uncertainties outside its core markets.

Company executives defended the project, stating that the U.S. smelter would diversify operations, create long-term value, and align Korea Zinc with emerging global trends in clean energy and critical materials. Management emphasized that the facility would use advanced technology and meet strict environmental standards.

Despite these assurances, shareholders remain divided. Governance experts note that rising shareholder activism in Asia is forcing companies to justify major capital investments more clearly. The Korea Zinc case highlights a broader shift, where investors are increasingly willing to challenge management decisions, especially those involving large overseas projects.

Market observers say the outcome of this dispute could influence other Asian manufacturers considering expansion into the United States under similar policy incentives. If Korea Zinc fails to gain consensus, it could delay or even reshape future cross-border industrial investments.

For now, the focus remains on how the company addresses shareholder concerns in the coming weeks. Analysts expect continued volatility in Korea Zinc’s stock price until clarity emerges around the Tennessee smelter plan and internal governance issues.