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Seoul – Korea Zinc, whose management is embroiled in a takeover battle for the world’s top refined zinc producer, said on Monday a government panel had found its lithium-ion battery material technology was subject to export controls.
The industry ministry, which has a committee of experts to review and rule on applications for designating “national core technology”, also said the panel had recently granted Korea Zinc’s case and notified it of the decision without elaborating.
Korea Zinc has been trying to thwart a takeover by rival zinc maker Young Poong and private equity firm MBK Partners.
During the takeover tussle, Korea Zinc has raised concerns about whether new management could opt to sell the zinc producer, which also supplies materials used for microchips and electric vehicle batteries, to a foreign entity.
MBK and Young Poong said last month they had no plans to sell Korea Zinc to China, which is the world’s largest zinc producer.
MBK said on Monday as the largest shareholder it welcomed the designation, but the ruling on national core technology did not erase damage to shareholders caused by the company borrowing a large sum to finance a tender offer.
Korea Zinc borrowed heavily to buy back $1.5 billion of its shares at a premium last month.
Korea Zinc together with affiliate KEMCO hold the technology for the precursor material for cathodes in lithium ion batteries made from nickel, cobalt and manganese.
“The ruling will be the foundation to build a stable self-sufficient supply chain of the key material for secondary batteries based on entirely domestic technology,” Korea Zinc said in a statement.
The designation is yet to be made official through a public notice.
South Korean law states that the government controls the transfer of such technology “whose leak abroad could have a material adverse effect on national security and development of the national economy.”
Last week, Korea Zinc announced it was dropping a plan to issue $1.8 billion in new shares in the latest bid by Chairman Yun B. Choi to retain control of the company.
Choi and a group friendly to him hold about a 35% stake. Young Poong and MBK have nearly 40% of the shares after a tender offer.
(Reporting by Jack Kim and Hyunjoo Jin; Editing by Ed Davies)
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