Original Report: www.abc.net.au(full story)
- South Korean zinc producer Young Poong has initiated a $1.5 billion takeover bid for Korea Zinc.
- Concerns arise among workers in North Queensland regarding the impact on local zinc and renewable energy projects.
In Townsville, hundreds of workers involved in zinc refining and renewable energy projects are currently on edge as a significant corporate conflict unfolds in Seoul. This dispute between two founding families of Korea Zinc has raised serious apprehensions about the future of Australian subsidiaries Sun Metals and Ark Energy, which operate a solar farm, zinc refinery, and a green hydrogen initiative in the region.
Young Poong, supported by the private equity firm MBK, announced a tender offer aimed at acquiring more shares in Korea Zinc. Following this announcement, Sun Metals issued warnings regarding potential job losses at the Townsville refinery. However, Young Poong refuted these claims, assuring continued investment in the subsidiaries’ renewable energy ventures.
Michael Choi, Sun Metals’ CFO, voiced apprehensions over the takeover, emphasizing that the private equity firm’s focus on short-term profits could jeopardize vital long-term investments in Australian projects, including Ark Energy’s green hydrogen initiative, set to commence production by 2030. He underscored the critical nature of support for the solar farm, which supplies approximately 25% of the refining operations’ energy needs.
Choi has actively lobbied Queensland senator Nita Green, expressing his worries about the implications of the takeover. Although Senator Green has shared her concerns, the federal government’s response has been notably restrained.
Amidst this backdrop, energy analyst Tim Buckley identified the ongoing conflict as a notable event in the global zinc industry. He outlined the significance of the Korean corporate dynamic, which has seen cooperation give way to competing interests, particularly with MBK’s ambition to gain control of Korea Zinc. While Buckley acknowledged potential shifts towards “green” zinc and renewable initiatives, he cautioned that predicting the exact consequences of these corporate maneuvers on Australian operations remains uncertain.
In response to the rising fears, Young Poong reiterated that its commitment to renewable energy projects would remain intact, emphasizing the importance of these initiatives in enhancing Korea Zinc’s overall corporate value. A spokesperson assured that employment levels at Sun Metals would not be affected by the takeover bid. Both the takeover proposals from Korea Zinc and Young Poong are approaching their submission deadlines later this month.
