Yeongpung: "Goryeoa-yeon's Notice of 'Suspension of Sulfuric Acid Handling Agency' Is Just an Excuse"

"If Permits Are Obtained, Consignment Processing Is Possible"
Criticism: "Used as a Tool in the Management Rights Dispute"

Yeongpung Korea Zinc strongly opposed the notification to suspend sulfuric acid handling agency services due to administrative measures by environmental authorities, calling it "a strategic act related to the management rights dispute."

On the 15th, Yeongpung stated in a press release, "The recent notification from Korea Zinc to suspend sulfuric acid handling agency services citing government improvement orders is merely an excuse," and criticized, "It is a tactic to exploit the sulfuric acid logistics consignment work, which the two companies have carried out without issues for over 20 years, as a tool in the management rights dispute."

Yeongpung Seokpo Smelter. Provided by Yeongpung

Korea Zinc recently notified Yeongpung to suspend sulfuric acid handling agency services, citing administrative measures from the Nakdong River Basin Environmental Office under the Ministry of Environment for violating Article 27 of the Chemical Substances Control Act.

In response, Yeongpung pointed out, "The issue arose because Korea Zinc did not obtain the necessary business permits while performing sulfuric acid logistics work under the sulfuric acid handling agency contract," and added, "Although this problem could be easily resolved by simply applying for the relevant permits, they intend to use this as an excuse to suspend the sulfuric acid logistics consignment work."

Article 27 of the Chemical Substances Control Act stipulates the permits required for manufacturing, selling, storing, and transporting hazardous substances, and obtaining the necessary permits for the relevant work prevents any issues.

Since the 2000s, Yeongpung and Korea Zinc have exported most of the sulfuric acid products, a byproduct produced in each company's zinc smelting process, through Onsan Port. In particular, Yeongpung transported sulfuric acid produced at the Seokpo Smelter in Bonghwa-gun, Gyeongbuk, by rail to Onsan Station, and then used Korea Zinc Onsan Smelter’s pipeline and sulfuric acid tanks on certain sections from Onsan Station to Onsan Port for a fee. This was based on the sulfuric acid handling agency contract between the two companies.

However, following the regular shareholders' meeting in March last year, the management rights dispute intensified, and Korea Zinc stopped renewing the sulfuric acid handling agency contract.

Yeongpung claimed that "Korea Zinc abused its dominant position and violated the Fair Trade Act," filing a 'lawsuit to prevent unfair trade practices' and a 'preliminary injunction to prohibit refusal of transactions.' The related lawsuits are currently ongoing.

Yeongpung criticized, "Korea Zinc’s recent notification to suspend sulfuric acid handling agency services is a continuation of the strategic severance of transactions following the refusal to renew the existing contract," and added, "It is intended to gain an advantage in the management rights dispute."

Sulfuric acid is an essential byproduct produced during the smelting process, and delays in its handling can disrupt zinc production.

Yeongpung announced that to prepare for sulfuric acid logistics issues, it is installing an additional sulfuric acid storage tank at Donghae Port, in addition to its two existing tanks, and is preparing alternatives to replace the existing contract. It also plans to resolve the issue by maximizing the use of sulfuric acid tanks at the Seokpo Smelter and export facilities at Donghae Port.