Korea Zinc announces Tennessee-based $7 billion smelter project backed with U.S. funding

Korea Zinc, one of the world’s leading minerals and metals companies, is moving forward with a $7.4 billion joint-venture smelter project in the U.S. as Washington moves to reduce reliance on China for critical minerals.

The company announced Monday it will purchase Nyrstar Zinc in Clarksville, Tennessee, and build a new smelter. The project will be backed by the U.S. government, with the departments of Defense and Commerce jointly spending money on its construction.

This plant represents the first U.S.-based zinc smelter and critical minerals processing facility since the 1970s, Deputy Defense Secretary Steve Feinberg said in a statement announcing the project. Nyrstar’s current smelter in Clarksville is the only zinc smelter in the U.S., operating for nearly 50 years.

The “U.S. Smelter” project is expected to have $6.6 billion in capital expenditures, with a total planned cost of $7.4 billion, including working capital and financing costs. The Defense Department will spend $760 million to become the largest shareholder at 40%, according to Korea JoongAng Daily.

The Korean publication said Korea Zinc has approved a $1.9 billion third-party capital increase for the joint venture, and the U.S. government would ultimately hold a roughly 10% stake in Korea Zinc through the joint venture.

Up to $4.7 billion will reportedly be raised through loans backed by the U.S. government and financial investors, $210 million will come in subsidies from the Commerce Department, and another $585 million will be funded by Korea Zinc.

Site preparation and foundational work will begin in 2026, and full-scale construction will start in 2027, expected to be finished in 2029, according to Korea Zinc. Phased operations will begin with zinc, lead and copper.

Korea Zinc will base its roughly 6.99 million-square-foot smelter on the model of its Onsan Smelter in Ulsan — the world’s largest single-site smelter by production capacity.

The new facility is projected to process approximately 1.1 million tons of raw materials annually, producing a total of 540,000 tons of finished products.

“Our country will now produce, in volume, 13 critical and strategic minerals that are vital to aerospace and defense, semiconductors, AI, quantum computing, autos, industrials, and national security,” Secretary of Commerce Howard Lutnick said in the statement.

The deal also includes a new production facility in Gordonsville, Tennessee, and will reopen a former mine.

The project is estimated to create 750 new jobs, and 1,464 total jobs from spinoff employment through suppliers, contractors and supporting services, Clarksville Now reported. It is estimated to add $288.6 million to the local economy in Montgomery County over 20 years.

Sen. Bill Hagerty, Tennessee Republican, described the development as a major win for his state and the “largest single private corporate investment in Tennessee history.”

“Korea Zinc’s decision to build a world-class critical minerals refinery in our state is not just an economic victory – it is a geostrategic one that directly supports President Trump’s efforts to restore American economic security in partnership with trusted allies, like South Korea,” Mr. Hagerty said in a statement. “This project will expand the United States’ capacity to produce the minerals that power our advanced industries and defense capabilities, strengthening national security while delivering high-paying jobs for hundreds of Tennessee families.”

China dominates the world’s supply of critical minerals used in telecommunications equipment, semiconductors and military technology.

“With its project in the United States, Korea Zinc will solidify its position as a strategic partner supplying essential minerals for aerospace and defense,” said Korea Zinc Chairman Yun B Choi. “This will become a model case of strengthened U.S.-ROK economic security cooperation. Given the current geopolitical climate and strong U.S. support, now is the optimal moment for expansion into the American market.”