Goryeo Zinc Precursor Technology Designated as 'National Core Technology'... Overseas Sale Halted

Designated as a National Advanced Strategic Technology
Recognized for High-Nickel Precursor Technology
Government Approval Required for Overseas Sale
Sale Restrictions Even if Acquired by MBK

Korea Zinc's precursor manufacturing technology, a core raw material for secondary battery cathode materials, has been designated as a national core technology by the government. As a result, even if the MBK Partners and Youngpoong alliance succeeds in acquiring Korea Zinc, restrictions are expected, such as requiring government approval for the sale of certain businesses or the leakage of technology overseas.

According to the non-ferrous metals industry on the 18th, the Ministry of Trade, Industry and Energy recently announced, after a review by a specialized committee, that Korea Zinc's "manufacturing and process technology for lithium secondary battery nickel (Ni) content exceeding 80% cathode active material precursor" has been designated as a national core technology. This technology was also recognized as a national advanced strategic technology.

Under the Industrial Technology Protection Act, the government designates technologies that could have a significant impact on national security and the national economy if leaked overseas as national core technologies. Currently, about 70 technologies in major industries such as semiconductors, displays, electrical and electronics, and shipbuilding are managed as national core technologies. Additionally, under the National Advanced Strategic Industry Act, technologies with significant economic security and national economic effects are also designated as national advanced strategic technologies.

Korea Zinc applied for a review of this technology to the Ministry of Trade, Industry and Energy last September and was recognized as a national core technology in the electrical and electronics field and as a national advanced strategic technology in the secondary battery field, respectively.

This designation does not make the MBK alliance's attempt to acquire Korea Zinc impossible, but restrictions are expected after the acquisition. Due to the nature of private equity funds aiming to recover investment through the sale of some businesses, if assets or businesses in fields designated as national core technologies are sold overseas, government approval must be obtained.

A Korea Zinc official stated, "Through the proprietary technology we possess, we can improve precursor productivity and enable manufacturing of excellent quality by shortening the overall process time, reducing process costs, and improving line arrangement efficiency." He added, "It is expected to contribute to diversifying the supply chain of key minerals for domestic secondary battery materials, reducing dependence on specific countries, and contributing to the economic security of the battery industry."

Meanwhile, Korea Zinc is accelerating the establishment of a domestic mass production system for high-nickel precursors to secure a domestic supply chain for secondary batteries. In November last year, through its subsidiary Kemco, it broke ground on an 'All-in-One Nickel Refinery' in Ulsan, with trial operations scheduled for next year. Additionally, in 2022, Korea Zinc established a joint venture with LG Chem called 'Korea Precursor,' and in March of this year, completed the world's first precursor production plant with an annual capacity of 20,000 tons applying an innovative process.