Consensus Grows on the Need for a 'De-risking from China' Supply Chain
New Germanium Plant to Be Built at Onsan Smelter
Investment of 140 Billion Won... Operations to Begin in 2028
On August 25 (local time), Korea Zinc signed a memorandum of understanding (MOU) with Lockheed Martin, the world’s leading defense company, to cooperate on the supply and purchase of germanium and the supply chain of critical minerals. This MOU is a private sector achievement aligned with discussions on economic security cooperation between South Korea and the United States. It is significant as it leads the establishment of a 'de-risking from China' supply chain for critical minerals and marks the first successful case of Korea-U.S. cooperation in the field of key rare metals.
Korea Zinc and Lockheed Martin signed a memorandum of understanding (MOU) on the 25th local time in the United States to cooperate on the supply and purchase of germanium and the supply chain of critical minerals. From left, Jungkwan Kim, Minister of Trade, Industry and Energy, Yunbeom Choi, Chairman of Korea Zinc, Michael Williamson, President of Lockheed Martin International, Howard Lutnick, U.S. Secretary of Commerce. Korea Zinc
The signing ceremony was attended by Yunbeom Choi, Chairman of Korea Zinc; Moogyung Jung, President of Sustainable Management; Kijoon Kim, Executive Vice President; Michael Williamson, President of Lockheed Martin Global; and Nancy Zhuozhen Schlegel, Vice President, among other key figures.
Taking the recent Korea-U.S. summit as an opportunity, the two companies agreed to actively pursue the establishment of a critical minerals supply chain independent of China at the private sector level, and to create a successful case of supply chain cooperation between the two countries.
The MOU centers on Korea Zinc supplying Lockheed Martin with germanium refined (including the entire process from mining to production) in countries other than China, North Korea, Iran, and Russia, while Lockheed Martin will pursue an offtake agreement to secure priority rights to purchase these products. Based on this MOU, Korea Zinc and Lockheed Martin will begin concrete discussions for a long-term contract in the future.
Lockheed Martin, the world’s largest defense contractor, was established in 1995 through the merger of Lockheed and Martin Marietta. It produces the F-22 Raptor and F-35 stealth fighters, the Aegis Combat System, Patriot missiles, and more. As of the end of last year, its order backlog reached a record high of 176 billion dollars (about 246 trillion won). The company has maintained a cooperative relationship with the South Korean government and industry for over 40 years, ranging from the assembly and production of UH-60 helicopters and F-16 fighters to the joint development of the T-50 supersonic advanced trainer aircraft.
Germanium is a key material used in the defense industry for night vision goggles, thermal imaging cameras, and infrared detectors. It is also utilized in the space industry for solar panels that power satellites. As an essential metal, it is widely used in advanced technology fields such as high-performance semiconductor devices, specialty gases for semiconductor processing, LEDs, optical fiber cables, and superconductors.
Currently, China is the world’s largest producer of germanium. According to KOTRA, as of 2021, 68% of the global refined germanium production of 140 tons came from China. As trends such as export controls on critical minerals and the weaponization of resources intensify, and concerns grow over the concentration of resource production in specific countries, establishing a stable supply chain has emerged as an international challenge that needs to be addressed.
Coinciding with the signing of the MOU with Lockheed Martin, Korea Zinc plans to invest approximately 140 billion won in its Onsan smelter in Ulsan to construct a new germanium plant. After trial operations in 2027, the company aims to begin full-scale production in the first half of 2028, producing about 10 tons of high-purity germanium dioxide (germanium metal). With this, Korea Zinc will establish itself as the only germanium producer in South Korea.
A Korea Zinc official stated, "As a company representing South Korea’s key industries, stabilizing the supply chain for critical minerals is a highly important strategic task for both the government and the private sector in terms of national interest. With the signing of the MOU with Lockheed Martin, we will further solidify the strategic partnership between Korea and the United States, and actively contribute to private sector cooperation in economic security."
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