TMC Invested 180 Billion KRW by Korea Zinc Plunges 27.5% After International Law Violation Probe

TMC Selected for Investigation over International Law Violations
Korea Zinc Faces Controversy Just Two Months After Investment... 'Greenwashing' Criticism Mounts

Choi Yoonbum, Chairman of Korea Zinc, invested up to 180 billion KRW in a Canadian mineral development company that has recently been designated as a subject of investigation by the International Seabed Authority (ISA) for potential violations of international law. Following this news, the company's stock price has plummeted by nearly 30%.

As of August 1, the share price of TMC, which is listed on the Nasdaq, stood at $5.87, marking a 27.5% drop over five trading days compared to $8.10 on July 24. This sharp decline is believed to be a result of the ISA's decision at its 30th annual meeting in Jamaica to have its Legal and Technical Commission investigate The Metals Company (TMC) for possible breaches of international law. In April, TMC bypassed the ISA and independently applied to the U.S. government for a deep-sea mining permit.

The ISA criticized this move, stating that it constitutes "a violation of international law and undermines the principles of multilateralism and the United Nations Convention on the Law of the Sea (UNCLOS) framework." The ISA announced on its official website that TMC had violated the 'principles of the deep seabed' as stipulated in UNCLOS, and that sanctions such as termination of exploration contracts or fines could be imposed.

The international community and environmental organizations have also raised concerns about TMC's actions. Greenpeace International emphasized the need to "protect the multilateral system" and urged governments to halt deep-sea mining activities. The U.S. Congress is currently pursuing legislation to restrict mining.

Previously, in June, Korea Zinc acquired approximately 5% of TMC's common shares for about 116.5 billion KRW. If additional call options are exercised, the total investment could reach 180 billion KRW. Korea Zinc explained that this investment was "a strategic decision to secure raw materials and enter the North American market." However, in light of the ISA investigation, the company is facing criticism for 'greenwashing,' meaning that its investments are only nominally environmentally friendly and lack genuine commitment.

Choi Yunbeom, chairman of Korea Zinc, is speaking at a Korea Zinc press conference held on the 13th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. On the right is CEO Park Giduk. On this day, Chairman Choi stated, "I will step down from the position of chairman of the board as soon as possible and have an outside director take the role of chairman of the Korea Zinc board." Photo by Kim Hyunmin