By Jihoon Lee and Julian Luk
SEOUL/LONDON (Reuters) – South Korea’s Supreme Court has rejected a legal appeal to prevent a suspension of the Seokpo zinc smelter, its operator Young Poong Corp said.
Seokpo was ordered by the Gyeongsangbuk-do provincial government in 2021 to halt its operations for one month and 30 days due to a violation of the Water Environment Conservation Act, but has since pursued legal remedies to block the shutdown.
The South Korean court has now decided to uphold the 2021 order, Young Poong said in a regulatory filing on Nov. 1. The company said it will keep investors updated when there is a timetable for the shutdown.
The fate of the 400,000 metric ton-per-year smelter, the world’s sixth-largest, has been closely watched as zinc prices soared 17.5% this year amid tight mining supply.
The CEO of Young Poong was arrested in August as part of an investigation of his liability over subsequent safety-related deaths at the Seokpo operation. The company had already cut production at Seokpo since March.
Young Poong has been in a bitter fight for control of the $18 billion zinc empire Korea Zinc, the world’s biggest zinc producer.
The two majors will split operations in zinc and sulfuric acid sales and procurement of raw materials of zinc concentrates, which have become extremely costly to secure.
A series of disruptions – including a delay at Russia’s Ozernoye, a slow ramp-up at Kipushi in Democratic Republic of Congo and force majeure at Century Zinc’s operation in Australia – has strained global zinc concentrate supplies.
On top of the rising cost of raw material, zinc smelters also face an uncertain outlook for refined zinc, mainly used in protecting steel from corrosion.
The latest Reuters poll indicated that the world’s fourth most used metal is heading for a moderate surplus of 115,000 tonnes next year.
(Reporting by Jihoon Lee and Julian Luk; Editing by Jan Harvey)
