Korea Zinc Co., the world’s largest metal smelter, cautioned of a challenging outlook as processing fees remain low, costs increase, and an ongoing struggle for control of the company puts pressure on both management and staff.
Korea Zinc stated that the business outlook for 2025 appears “very bad.” It highlighted that intensified competition for ore from Chinese smelters has led to a sharp decline in the treatment charges miners pay for processing. Additionally, the company flagged the challenge of rising electricity costs in its statement on Sunday.
Korea Zinc is embroiled in a prolonged takeover battle, with its largest shareholder, Young Poong Corp., joining forces with private equity firm MBK Partners Ltd. last September to initiate a hostile bid. This dispute has disrupted the smelter’s share price, sparked significant discussion in corporate South Korea, and coincides with processors facing low fees.
The company stated that the takeover threat “has put Korea Zinc’s management and employees at risk, requiring them to navigate through the crisis.”
The company announced that, to enhance profitability, it plans to increase recovery rates for rare metals like indium and antimony by 20% to 30% from the zinc and lead concentrates it processes. This could increase gross profit by 25.3 billion won ($17.2 million) by 2025, with projections exceeding 70 billion won by 2027.
In the medium to long term, Korea Zinc plans to keep investing in expansion. In December, it announced that it would boost copper production to 150,000 tons annually by 2028, up from around 30,000 tons in 2023. This is part of a broader strategy to diversify into new sectors, including battery metals, recycling, and renewable energy.
