The U.S. Department of Defense has acquired a 10% equity interest in a newly constructed zinc smelter in Tennessee, a joint venture led by Korea Zinc. The move underscores Washington’s strategic push to reduce reliance on Chinese-sourced critical minerals by building domestic refining capacity for battery-grade zinc and other key materials.
- U.S. Department of Defense acquired a 10% equity stake in a Tennessee zinc smelter
- Facility is a joint project led by Korea Zinc with $320 million in total investment
- Initial annual capacity: 250,000 metric tons of zinc concentrate; target expansion to 400,000 tons by 2028
- Zinc is critical for defense applications, battery production, and industrial coatings
- Project supports U.S. efforts to reduce reliance on Chinese-sourced refining capacity
- Expected to create over 300 construction and 180 permanent jobs in Tennessee
The U.S. government has taken a direct ownership stake in a newly established zinc smelting facility in Tennessee, marking a significant step in national efforts to secure resilient supply chains for critical minerals. The Department of Defense acquired a 10% share in the project, which is being developed by Korea Zinc, a major South Korean mining and metals company, in partnership with American industrial entities. The smelter, located in the southeast U.S., is designed to process raw zinc ore into high-purity refined zinc suitable for use in lithium-ion batteries, electric vehicles, and defense electronics. The investment reflects a broader federal strategy to de-risk supply chains for minerals essential to national security and clean energy infrastructure. Zinc is a critical component in corrosion-resistant coatings for military equipment and in battery anodes, with demand projected to grow by over 12% annually through 2030. By securing a stake in this facility, the Pentagon aims to ensure a domestic source of supply, reducing exposure to geopolitical disruptions and export controls that have historically affected the U.S. reliance on Chinese refining capacity. The smelter will have an initial annual processing capacity of 250,000 metric tons of zinc concentrate, with plans to expand to 400,000 tons by 2028. The facility is expected to create more than 300 construction jobs and 180 permanent positions, contributing to regional economic development. The U.S. government’s 10% equity position is part of a $320 million public-private investment package, with Korea Zinc contributing $240 million and private U.S. investors providing the remainder. Market analysts note that this move could influence global zinc pricing dynamics and encourage similar public investments in critical minerals infrastructure. The smelter’s output will be prioritized for U.S. defense contractors and clean energy firms under federal procurement guidelines. The project also aligns with the Defense Production Act’s Section 1703, which authorizes government equity participation to support domestic manufacturing of critical materials.