South Korea's highest court rejects appeal from zinc smelter against shutdown

YoungPoong

05/11/2024 14:07

By Jihoon Lee and Julian Luk
       SEOUL/LONDON Nov 5 (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  000670.KS 
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.  CMZN3 
    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  010130.KS , 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.  COMMODITYPOLL21 

 (Reporting by Jihoon Lee and Julian Luk; Editing by Jan Harvey)
 ((julian.luk@thomsonreuters.com; Reuters Messaging:
julian.luk.thomsonreuters.com@reuters.net))