In 2022 AME forecasts South Korea to produce 918kt of finished zinc, a 1.5% increase from 2021 and equating to 6.8% of the global supply. Supply is forecast to remain stable at 918kt in 2023 before increasing by 3.4% in 2024 to 949kt.

As South Korea does not mine zinc domestically all concentrates to feed smelters are imported. South Korea has a highly stable and mature economy and a healthy import market which is not expected to change in the short to medium-term.

South Korea imports nearly 1Mt of zinc in concentrates every year, with import rates remaining relatively steady over the past two years. Zinc concentrate imports are sourced primarily from Australia and Peru, the world’s largest zinc concentrate producers, with South Korean companies holding direct investments in mining in these countries.

Smelting capacity is expected to rise in the long-term to reach 1.5Mt by 2040 as efficiency improvements are made to existing sites, AME expects imports to increase to match smelter demand.

India is set to overtake South Korea as the second-largest global finished zinc supplier in the long-term, with expectations for its huge anticipated growth far outshining modest improvement plans and additional capacity coming from South Korea.

South Korean Green Ambition

At COP26 South Korea announced an updated NDC which was submitted to the UNFCCC in December 2021. In this updated NDC South Korea committed to reducing greenhouse gas emissions by 40% by 2030 compared to 2018 levels of 715.51MtCO2e.

South Korea also plans to achieve net-zero carbon emissions by 2050. To help achieve these goals in August 2021 the Carbon Neutrality and Green Growth Act for the Climate Change Bill was passed. The law entered force on March 25, 2022.

In 2021 South Korea emitted 679MtCO2eq an increase of 3.5% from 2020. This followed a drop of 6.2% in 2020 following Covid-19 lockdowns.

To meet their emission reduction plans, the previously coal-reliant country is relying on transitioning to clean energy sources. The South Korean government announced its ambition to grow renewable energy capacity 60GW by 2034, with 12GW of this is aimed to be offshore wind by 2030.

The country also aims to achieve a 30% share of renewables in its energy production mix by 2030. The 2021 Renewable Energy Law requires all major electricity utilities to increase the share of their renewables from 10% to 25% by 2034.

The South Korean government also announced an  updated Korean New Deal 2.0, with an increased budget of KRW 220tn (US$167bn). The five-year development strategy aims to promote digitalisation, accelerate the transition to a low-carbon economy, and strengthen the social safety net. It will bolster the country’s economic recovery and boost zinc demand. The government has allocated around US$52bn to its emissions reduction policies.

Korea Zinc Dominantion

Korea Zinc ranks as the top global producer of finished zinc globally, they overtook Nyrstar and Glencore, who have both been widely impacted by the rising energy costs in Europe, to become the world’s largest finished zinc producer in 2021, and they look set to remain at the top.

AME forecasts Korea Zinc will produce 1.1Mt of finished zinc in 2022, up 3.6% on year. Korea Zinc’s production profile is set to remain stable in the long-term out to 2040 at 1.1-1.2Mt with no capacity expansion projects or zinc smelter acquisitions currently announced.

Korea Zinc owns the world’s largest smelter, the Onsan smelter, located in the North Gyeongsang Province. The Onsan refinery in 2022 is forecast to produce 650kt of finished zinc, 4.8% of global supply.

Korea Zinc is also expanding into the recycled zinc market, it owns the Korean Recycling Plant in the Cheonbuk Industrial Complex under its subsidiary Zinc Oxide Corporation, taking ownership in 2017. The plant recycles electric arc furnace dust (EAFD) to produce approximately 62ktpa of zinc.

The modest growth forecast for the company will be the result of continued maintenance of existing smelting capacity and the gradual expansion and efficiency gains in existing plants rather than of any significant new capacity investments.

Korea Zinc also operates a zinc smelter in Townsville, Australia, through its subsidiary Sun Metals Corporation. In 2020 Sun Metals joined RE100, with Korea Zinc following in 2021. RE100 is a global initiative that promises to convert 100% of the electricity used by the world's most influential companies to renewable energy in all their business sites.

Sun Metals is pushing to significantly increase the use of renewable energy through its new and renewable energy business of Ark Energy, which was newly established by Korea Zinc in February, 2021.

Ark Energy recently announced a 923-megawatt (MW) wind power generation project (Macintyre Wind Farm) to be built in Queensland which has become the driving force for Korea Zinc's new and renewable energy business.

Korea Zinc plans to achieve 100% Green Zinc through 0% net-zero carbon emissions by 2050 by aggressively expanding its eco-friendly portfolio including renewable energy projects and green hydrogen energy business. In 2021 Korea Zinc had 1.9MtCO2eq scope 1 emissions and 1.6MtCO2eq scope 2 emissions.

Recycled Zinc

Outside of Korea Zinc and its affiliated companies production in South Korea is limited to recycled zinc which is headed by Befesa. Befesa is a global leader in the recycling of hazardous waste materials produced by the steel and aluminium industries.

Befesa entered the market in South Korea in 2012 with the acquisition of the Korean Hankook. Increased environmental regulation for hazardous waste introduced in South Korea in 2012 created new opportunities for Befesa and by 2016 they had doubled capacity to 220kt at the Gyeongju crude steel dust recycling site which produces around 50ktpa of zinc.

In 2019 Befesa opened the Pohang WOX washing steel dust recycling site which has capacity to recycle 60tkpa and produces around 20ktpa of zinc.

Befesa had total greenhouse gas (GHG) emissions of 797ktCO2e in 2021. Befesa is aiming to reduce GHG emission intensity by 20% by 2030 and achieve net-zero in 2050.

All Befesa plants have implemented and certified the measurement of GHG emissions in line with ISO14064 for GHG emissions. To help meet emissions targets Befesa applies ‘Best Available Technology’ (BAT) for energy efficiency.