US congressman calls for Washington’s attention to Korea Zinc dispute

U.S. Rep. Eric Swalwell called for the Department of State’s attention to the ongoing conflict regarding the control of the world’s largest zinc smelter, Korea Zinc, stressing the company’s importance in Washington’s efforts to protect its critical minerals supply chains from possible Chinese leverage.

According to Korea Zinc, Swalwell recently wrote to Jose Fernandez, U.S. undersecretary of state for economic growth, energy and the environment, and asked for the U.S. government’s attention to the ongoing battle between the company and an alliance between private equity fund MBK Partners and Young Poong Group.

In the letter, Swalwell noted that Korea Zinc “has maintained its position as a global leader in allied efforts to expand and diversify the supply of critical minerals and insulate these supply chains from PRC leverage,” referring to China by its official name: the People’s Republic of China.

The congressman continued, stating that the company’s technology and supplies enable “major battery manufacturers in Korea, and across the globe, to have a reliable supply chain, free from PRC materials and technology.” However, MBK Partners’ close ties to China-based entities raise concerns about the potential transfer of Korea Zinc’s technologies to Chinese firms.

“Given the focus and investment track record of MBK Partners, it is possible that PRC-based or PRC-financed entities may be welcomed into a variety of transactions,” Swalwell wrote. “This could result in technology transfer to PRC entities as well as the dismantling of an important global player in the joint United States-Korea effort to insulate and expand critical minerals supply chains from the PRC.”

The congressman added that he hoped that the undersecretary would “continue to consult with” Korea’s Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs to ensure that the pending transaction could be reviewed in a manner that takes U.S. national security interests into consideration. Swalwell is a founder and a co-chair of the bipartisan Congressional Critical Materials Caucus.

Korea Zinc and the MBK Partners alliance have been engaging in a fierce battle over securing enough shares to gain the company’s management rights. Currently, the alliance is edging closer to gaining majority control of Korea Zinc, securing 40.97 percent of the company’s total stake and 46.7 percent of the voting shares. The transaction is set to be decided at a general shareholder meeting slated for Jan. 23.