On the 16th, Korea Zinc and global commodity trading company Trafigura signed an investment agreement worth a total of 184.9 billion KRW for the construction of an "all-in-one nickel smelter" at an agreement ceremony held at Korea Zinc headquarters in Nonhyeon-dong, Gangnam-gu, Seoul. Photo by Korea Zinc
Korea Zinc is investing in an 'All-in-One Nickel Refinery' together with the global raw materials trading company Trafigura.
On the 16th, the two companies signed an investment agreement worth a total of 184.9 billion KRW for the construction of the 'All-in-One Nickel Refinery' at Korea Zinc's headquarters. The investment funds from both companies will be used for the refinery construction costs and initial working capital.
Along with this investment agreement, the two companies also signed a contract to secure a stable supply of raw materials for the All-in-One Nickel Refinery. The amount of nickel supplied by Trafigura will reach approximately 20,000 to 40,000 tons annually, and Trafigura holds the right to secure production volume corresponding to its 20% investment stake from the total amount of nickel sulfate produced by Kemco.
Trafigura, a global trading company with sales of about 400 trillion KRW last year, leads the global resource brokerage market for crude oil, metals, minerals, and more worldwide. Korea Zinc, which possesses the world's number one non-ferrous metal refining technology, and Trafigura, which can stably procure nickel, a key mineral for secondary batteries, from various countries, are joining forces to build the 'All-in-One Nickel Refinery' through Korea Zinc's subsidiary Kemco. This refinery will not only respond to regulations such as the U.S. Inflation Reduction Act (IRA) but also produce various products in one place according to customer demands.
Kemco is a company that manufactures and sells nickel sulfate used as a precursor raw material. Currently, it produces up to 100,000 tons of nickel sulfate annually at a 6,600㎡ plant located near Korea Zinc's Onsan refinery. In June last year, Kemco established a joint venture called 'Korea Precursor Co., Ltd.' with LG Chem and plans to complete a precursor plant with an annual capacity of up to 20,000 tons within this year and start trial operations in 2024.
With this investment, Korea Zinc's stake in Kemco will increase from the existing 35% to 64%, and Kemco's management performance will be consolidated into Korea Zinc's financial statements. Trafigura will hold a 12.9% stake in Kemco through this investment. This investment is a follow-up to the business partnership announced last November and continues to expand with global partners such as Hanwha, LG Chem, Hyundai Motor Group, and Trafigura, who are participating in Korea Zinc's future growth strategy called the 'Troika Drive.'
Choi Yoon-beom, Chairman of Korea Zinc, stated, "We plan to do our best to maintain the reputation of the world's number one non-ferrous metal company in the nickel refining sector, a key material for batteries in the energy transition era," adding, "Through the All-in-One Nickel Refinery, which integrates the world's top refining technology, we will strengthen our position in the global nickel market."
Gonzalo De Olazaval, Global Head of Metals and Minerals at Trafigura, said, "We are honored to collaborate with Korea Zinc on this strategically important project that demonstrates the importance of metals in the energy transition," and added, "Trafigura's metals business, with its global network and scale, is optimally structured to support the development of new refining technologies."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
