Korea Zinc Co., the world’s largest smelter of the metal, warned of a tough outlook as processing fees languish, costs rise, and a drawn-out battle for control of the company challenges both management and staff. The business outlook for 2025 looks “very bad,” Korea Zinc said in a statement.
Increased competition for ore from Chinese smelters has significantly reduced the treatment charges that miners pay smelters for processing, it said on Sunday, while also flagging the challenge of higher electricity costs. With the company’s largest shareholder, Young Poong Corp., teaming up with private equity firm MBK Partners Ltd. last September to launch a hostile bid, the struggle has roiled the smelter’s share price, been a major talking point in corporate South Korea, and comes at a time when processors are battling low fees. The takeover threat “has put the management and employees of Korea Zinc on the line to overcome the crisis,” the company said. To improve profitability, the company said it would seek to raise recovery rates for rare metals such as indium and antimony by 20% to 30% from the zinc and lead concentrates it processes. That may boost gross profit by 25.3 billion won ($17.2 million) by 2025, and more than 70 billion won by 2027, it forecast. In the mid- to long-term, Korea Zinc plans to continue investing in expansion. In December, it said would increase copper production to 150,000 tons a year by 2028 from about 30,000 tons in 2023. That’s part of a strategy to branch out into new areas, including battery metals, recycling and renewables