Two years into control dispute

Korea Zinc urges growth focus for all shareholders

Troika Drive, Project Crucible to continue as planned

An aerial view of Korea Zinc's Onsan smelter complex [Korea Zinc]
An aerial view of Korea Zinc's Onsan smelter complex [Korea Zinc]

Korea Zinc marked two years of its corporate control dispute with MBK Partners and Youngpoong by calling for cooperation over conflict, proposing that the two sides work together toward the company's future rather than trade further blows. Rather than counter MBK and Youngpoong's statement demanding the resignation of Chairman Choi Yun-beom, Korea Zinc chose to emphasize corporate value enhancement and future growth, offering what it described as an inclusive path forward.

In a statement released Monday, Korea Zinc said MBK Partners and Youngpoong are "also major shareholders of Korea Zinc," adding that it believes "even with differences of opinion, we can fully discuss and cooperate around the shared goal of the company's long-term development and the interests of all shareholders."

"We hope they will join us in building a better future for the company — one defined by sustainable growth, enhanced corporate value, and lasting progress," the company said.

The dispute escalated in earnest when Youngpoong and MBK launched a tender offer for Korea Zinc shares on Sept. 13, 2024. In their statement Monday, Youngpoong and MBK said "the path we have walked over the past two years has not been a simple struggle over equity or a process of taking sides," and again said that Director Choi Yun-beom stepping down from management is "the starting point for normalizing Korea Zinc's governance."

In response, Korea Zinc chose to focus on "future growth" rather than engage in direct exchanges. The company said it accepts the outcome of the extraordinary shareholders' meeting on Sept. 9 as a sign of shareholder trust, and will continue to pursue governance improvements and corporate value enhancement. At that meeting, all three agenda items — including the appointment of audit committee members and independent directors — were passed.

Korea Zinc also reiterated the governance reforms it has carried out, including appointing an independent director as board chair and introducing a board competency matrix and external board evaluations. It has also pursued measures to strengthen board oversight of major investment decisions and to better protect minority shareholder rights. The company said it currently complies with all 15 core governance indicators set by Korea Exchange.

However, Korea Zinc said future discussions should not be confined to governance alone.

Having served as a pillar of South Korea's nonferrous metals industry for more than half a century, the company said responding to the reshaping of global critical mineral supply chains is equally important. With countries around the world treating critical mineral security and supply chain diversification as matters of economic security, maintaining a stable production base and global competitiveness goes beyond any single company — it is tied to national industrial competitiveness, Korea Zinc said.

"The current discussions need to take place from a broader perspective — one centered on the company's future competitiveness and the long-term value of all shareholders," Korea Zinc said, adding that governance improvements are themselves part of the process of supporting that future competitiveness.

The company said it has maintained business stability and pursued its future growth strategy throughout the two years of the control dispute. "Even amid the many difficulties and uncertainties of the past two years, we have continued to maintain business stability, advance our future growth strategy, and work to enhance long-term corporate and shareholder value," it said.

Korea Zinc said it plans to press ahead with its future business initiatives on schedule. The company intends to continue its "Troika Drive" — which bundles secondary battery materials, resource recycling and renewable energy around its core smelting operations — while building Project Crucible, its integrated smelter construction project in the United States, into a new growth engine.

Project Crucible in particular advanced a step further recently after receiving a Finding of No Significant Impact from a US federal environmental review. Korea Zinc is pursuing plans to build an integrated smelter in Tennessee with a total investment of $7.4 billion.

Going forward, Korea Zinc said it plans to translate Project Crucible and its broader global growth strategy into tangible business results, while expanding its role in critical mineral supply chains. Connecting the fruits of that growth to overall shareholder value was also cited as a key priority.

"As a company responsible for a key national industry, we will remain steadfastly focused on our core mission — fulfilling our role in global critical mineral supply chains, securing future growth drivers, and enhancing the long-term value of all shareholders," Korea Zinc said.


kwater@heraldcorp.com