Korea Zinc Strengthens Critical Metals Supply Chain Amid Export Controls

Korea Zinc's Strategic Role in Critical Metals Supply Chain

As tensions escalate in the U.S.-China trade relations, particularly concerning rare metals, Korea Zinc (KRX:010130) has found itself at the forefront of efforts to stabilize the supply chain for critical minerals. This comes after China announced significant export controls on five essential metals, thereby highlighting the urgency and importance of securing a resilient supply chain in these uncertain times.

On February 4, China declared an immediate ban on the export of tungsten, molybdenum, indium, bismuth, and tellurium, just minutes after U.S. President Donald Trump imposed an additional 10% tariff on Chinese imports. This move undoubtedly intensified the already strained relations and raised alarm about the potential repercussions for industries reliant on these metals for defense and clean energy applications, among others.

Korea Zinc stands out in this context, uniquely positioned as South Korea's only producer of indium, bismuth, and tellurium—three of the five metals impacted by the new restrictions. The company is not only vital in maintaining stability within the domestic market but also plays an essential role in the broader global supply chain for these critical resources.

Annual production figures underscore Korea Zinc's capacity: the company produces around 150 tons of indium, representing approximately 11% of global demand—about 1,400 tons. Indium is particularly valuable due to its applications in various alloys, including indium tin oxide (ITO), which is crucial for screens and touch technology, as well as in solar panels and LEDs. Meanwhile, Korea Zinc's production of bismuth ranges between 900 to 1,000 tons, and tellurium production sits between 100 to 200 tons annually.

Korea Zinc's proficiency extends beyond these metals, with the company also producing about 120 million tons of over ten different non-ferrous metals. This is made possible through its advanced proprietary technology, which enables the extraction of rare metals during the smelting of zinc and lead concentrates sourced from mines around the globe.

A spokesperson for Korea Zinc stated, "Given that some critical metals are produced by only a handful of countries, our role in securing a stable supply chain has become crucial. Despite global shortages, we continue to supply domestic industries with the necessary resources. We recognized the significance of global rare metals early on and have consistently ramped up production."

Korea Zinc demonstrated its production capabilities during previous export restrictions by China on antimony in September 2024, ensuring that the domestic supply remained stable amid chaotic market conditions. In response to these recent developments, the company is focusing on boosting production of indium, bismuth, and tellurium within South Korea. Currently, the dependency rates on Chinese imports for these metals are concerningly high, with figures showing that South Korea relies on China for 92.8% of its indium, 95.8% of its bismuth, and 61.2% of its tellurium needs.

As Korea Zinc forges ahead, it plans to replicate its past success in maintaining a steady supply despite external pressures. Their proactive approach in increasing domestic production not only alleviates current reliance on foreign sources but also solidifies their standing in an increasingly competitive global market. The company's dedication to navigating these turbulent trade waters illustrates their commitment to providing critical resources essential for various high-tech industries.

In summary, Korea Zinc's strategic maneuvers place it in a significant role at a time when the supply chains for critical metals are under scrutiny. As the global landscape continues to evolve, the company remains focused on sustainability within the industry and ensuring that domestic demands are met without compromise.

About Korea Zinc

Korea Zinc is a leading global firm in the smelting and refining of non-ferrous metals, processing materials from around the world to produce essential metals and rare elements crucial for high-tech industries. Leveraging cutting-edge technology, the company excels in recovering valuable metals from production byproducts, establishing it as a world leader in this vital sector.