China's sovereign wealth fund invests in MBK Fund No. 6 utilizing the Korea Zinc tender offer... "Chinese capital accounts for roughly 5%"

*This content was translated by AI.

U.S. President Donald Trump recently held discussions on strengthening critical mineral supply chains with industry officials at the U.S. Department of State in Washington, D.C.

At the meeting, U.S. Commerce Secretary Howard Lutnick emphasized that "critical minerals are not merely an economic issue but a national security concern," stating, "To maintain leadership in advanced manufacturing, artificial intelligence (AI), semiconductors, energy, and defense sectors, we cannot rely on foreign adversarial nations for the raw materials that form the foundation of our industries."

He then cited examples of investments in U.S. refining facilities, directly mentioning Korea Zinc. Secretary Lutnick said, "The goal is not simply to secure more minerals but to build a complete industrial supply chain on American soil."

He also stressed the need for cooperation with allied nations. "We are working to expand the scope of alliances worldwide and solve this issue together," he stated, expressing his commitment to securing reliable supply chains and strengthening global partnerships.

The fact that Korea Zinc, a Korean company, was directly mentioned while defining critical minerals as a national security issue and explaining efforts to enhance U.S. refining and purification capabilities has led to evaluations that Korea Zinc's U.S. operations are emerging as a pillar of cooperation between South Korea and the United States in critical mineral supply chains and economic security.

In this context, as the United States emphasizes the economic security importance of critical mineral supply chains, the composition of investors in MBK's fund engaged in a management rights dispute with Korea Zinc is once again drawing attention.

It is reported that CIC, China's sovereign wealth fund, participated as a limited partner (LP) in the Buyout Fund No. 6 utilized by MBK for its 2024 tender offer of Korea Zinc alongside Youngpoong.

MBK Vice Chairman Kim Gwang-il responded to questions about the proportion of Chinese capital in Buyout Fund No. 6 during the 2024 National Assembly national audit, stating "roughly 5%" (in that sense).

CIC is a sovereign wealth fund established in 2007 to diversify and manage China's foreign exchange reserves. According to the financial investment industry, CIC reportedly invested approximately 400 billion to 500 billion won in MBK Fund No. 6.

CIC's past track record of investing in resource companies also draws attention. In October 2009, CIC invested $1.5 billion in Teck Resources, a Canadian resource company producing zinc and copper, through its wholly-owned subsidiary Fullbloom Investment. At the time, CIC explained that the investment was made for long-term financial purposes.

The U.S.-China Economic and Security Review Commission (USCC), a congressional body, analyzed in a 2013 report that although CIC claimed to be a profit-driven financial investor, it had cases of investing in alignment with Chinese state-owned enterprises in the resource sector.

However, it has not yet been confirmed whether CIC's past investments in resource companies are directly related to MBK's tender offer for Korea Zinc.

MBK's issue regarding Chinese capital was also a contentious point during the 2024 National Assembly national audit. People Power Party Representative Park Sang-woong expressed concern that if Korea Zinc were to fall into a private equity fund associated with Chinese capital, there would be a risk of technology leakage. Democratic Party of Korea Representative Heo Seong-moo also pointed out that there is public concern regarding the proportion of Chinese capital in MBK's fund.

MBK maintains that CIC, China's sovereign wealth fund, is merely an LP contributing about 5% of the total committed amount of Fund No. 6, with the majority consisting of pension funds from various countries and global institutional investors. Additionally, MBK emphasizes that CIC is an institutional investor that has invested in multiple asset management firms in the global private equity market and that as an LP, CIC does not participate in individual investment decisions or the management of invested companies within the fund.

An industry official pointed out, "As the United States defines critical minerals as a matter of national security, variables such as supply chains and economic security have also emerged in the management rights dispute surrounding Korea Zinc."

Especially given that critical minerals and advanced refining technologies are evaluated as strategic assets directly linked to national security, voices are being raised in political circles, academia, and parts of the business community that the issue of Korea Zinc's management rights must be examined not only in terms of corporate governance but also considering the source and nature of capital.

The official further predicted, "Ultimately, the debate surrounding Korea Zinc is expanding beyond the mere fact that Chinese capital is included in MBK's fund to a broader question of how far supply chain stability and economic security should be considered in transactions involving management rights of critical mineral companies."

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*This content was translated by AI.