A hostile takeover bid for Korea Zinc, a global leader in zinc production, is raising fears about the future of the company's Australian operations, including key zinc and renewable energy projects in North Queensland.
A$1.5 billion offer on the table
The bid, led by South Korean zinc producer Young Poong and backed by private equity firm MBK, seeks to increase its stake in Korea Zinc with a A$1.5 billion tender offer, which is set to expire later this month.
Korea Zinc’s Australian subsidiaries Sun Metals and Ark Energy are heavily involved in renewable energy, including a solar farm and a green hydrogen project.
These operations are crucial to the company’s shift toward 'green zinc' production.
Sun Metals operates a zinc refinery in Townsville, one of the region’s largest private employers, and its solar farm powers approximately 25% of the refinery.
Long-term investments in jeopardy
The takeover bid has sparked concerns from Sun Metals' leadership, who argue that the move could jeopardise long-term investments in both zinc smelting and renewable energy projects.
With Ark Energy’s green hydrogen project scheduled to begin production by 2030, along with other renewable projects along Australia’s east coast, there are fears that private equity involvement could focus on short-term profits, potentially undermining these initiatives.
Young Poong has refuted these claims, stating that it has no plans to alter the company’s renewable energy strategy or reduce workforce numbers in Australia.
The company has reassured business leaders and employees that it remains committed to maintaining employment and continuing its investment in renewable energy.
Both Korea Zinc and Young Poong’s offers are expected to conclude later this month, leaving the future of the company’s Australian operations uncertain.