Seoul, Dec 26, 2024, IANS

Seoul, Dec 26 (IANS) A member of the United States Congress has expressed concerns over private equity firm MBK Partners Ltd’s takeover bid for Korea Zinc, together with its biggest shareholder, Young Poong Corp, due to critical minerals' supply chain issues, the zinc company said on Thursday. Korea Zinc has been caught in a monthslong battle to fend off a takeover bid by the MBK-Young Poong alliance, which initiated the management tussle on Sept. 13 by launching a tender offer for an additional stake in the world's biggest refined zinc smelter. In response, Korea Zinc, with the support of US-based Bain Capital, conducted a massive stock buyback. In his letter sent to Jose Fernandez, US undersecretary of state for economic growth, energy and the environment, US Rep. Eric Swalwell (D-CA) said, "Korea Zinc has maintained its position as a global leader in allied efforts to expand and diversify the supply of critical minerals and insulate these supply chains from PRC leverage." PRC is short for China's official name, the People's Republic of China. Korea Zinc is vital to US-led global efforts to loosen China's grip on the supply of metals for energy transition. Given the focus and investment track record of MBK, it is possible that PRC-based or PRC-financed entities may be welcomed into a variety of transactions in case of the MBK side's acquisition of Korea Zinc, Swalwell said in the letter. "This could result in technology transfer to PRC entities as well as the dismantling of an important global player in the joint United States-Korea effort to insulate and expand critical minerals supply chains from the PRC," Swalwell said. The congressman asked the undersecretary to consult with his counterparts at Korea's foreign and trade ministries "to ensure that this transaction continues to be reviewed in a manner that takes into consideration a variety of factors, including the economic impacts as well as our shared national security interests." When contacted by Yonhap News Agency, MBK said it has no statement on the letter. Last month, the Seoul government added Korea Zinc's high-nickel precursor manufacturing process to the list of national core and high-tech strategic technologies at the request of the company. With this designation, any exports of this technology or any foreign investment involving mergers, acquisitions or joint ventures will require approval from the trade ministry, the letter said. The Young Poong camp now controls 40.97 per cent of Korea Zinc, while Korea Zinc Chairman Choi Yun-beom and related parties own about 34 percent of the company. Korea Zinc plans to hold a shareholders' meeting on January 23 to vote on the appointment of two groups of new board members recommended by Korea Zinc and the Young Poong camp.