Korea Zinc has entered into a partnership with the U.S. Department of War and the U.S. Department of Commerce to develop a large-scale critical minerals smelter in Clarksville, Tennessee, U.S.

The smelter will manufacture 13 nonferrous metal products, including zinc, lead, copper, gold, silver, antimony, indium, bismuth, tellurium, cadmium, palladium, gallium, and germanium, as well as sulfuric acid and semiconductor-grade sulfuric acid. Eleven of these products are classified as “critical minerals” by the U.S. government.

Some of these critical minerals are used in electric vehicles and renewable energy technologies.

The project involves an initial, conditional commitment that includes U.S. federal and private investment to support a domestic critical minerals facility with expected capital expenditures of $6.6 billion and a total planned investment of $7.4 billion, including working capital and financing costs.

The smelter, referred to as the “U.S. Smelter,” will be constructed on a site covering approximately 650,000 square meters and is designed as an integrated facility producing base metals, precious metals, and critical and strategic minerals.

The project will be developed at Nyrstar’s existing smelter site, the only zinc smelter in the U.S., which has operated for nearly 50 years.

Site preparation and foundational work are scheduled to begin in 2026. Full-scale construction is planned to start in 2027, with completion targeted for 2029. Phased commercial operations are expected to commence in 2029, beginning with the production of zinc, lead, and copper.

Once fully operational, the facility will process approximately 1.1 million tons of raw materials annually and produce around 540,000 tons of finished products.

Supply Chain Impact

The project is positioned as a response to rising geopolitical competition over natural resources and increasing U.S. policy focus on reducing dependence on specific countries for smelting and refining.

According to the U.S. Geological Survey, certain critical minerals, such as indium and gallium, are currently 100% import-dependent. The U.S. melter is intended to address structural supply chain vulnerabilities created by aging or closed domestic smelting facilities, while supporting demand from electric vehicles, batteries, artificial intelligence, semiconductors, data centers, and defense industries.

Financing Structure

The financing plan includes approximately $2.15 billion arranged by the U.S. Department of War together with investors for smelter construction, with Korea Zinc’s local subsidiary overseeing development using this capital and additional funds.

The U.S. Department of Commerce will provide $210 million in award funding under the CHIPS Act for U.S. equipment procurement and related purposes. The Department of War has conditionally committed $1.4 billion toward the project.

In 2023, the U.S. Department of Energy allocated up to $30 million to support cost reductions in extracting rare earths and other essential minerals and materials from domestic coal-based sources.