SEOUL, South Korea--(BUSINESS WIRE)-- According to local media reports *, Young Poong Group, currently engaged in a management dispute with Korea Zinc (KRX:010130), will no longer be able to export sulfuric acid, a hazardous yet essential byproduct from its zinc smelting processes at the Seokpo Smelter, via Korea Zinc’s Onsan Smelter as of January 11. Already hit by a suspension of operations, Young Poong now faces the additional challenge of potentially reducing production further, compounding its difficulties.

The Nakdong River Basin Environmental Office, under the Ministry of Environment, has reportedly issued an administrative order to Korea Zinc’s Onsan Smelter at the end of December last year. The order, citing a violation of Article 27 of the Chemical Substances Control Act, stated that Korea Zinc’s Onsan Smelter is prohibited from storing sulfuric acid gas brought in from third parties.

Following this order, Korea Zinc sent an official letter to Young Poong on January 6, notifying them that it would accept sulfuric acid up until January 10 and would no longer accept deliveries thereafter. Young Poong has confirmed that it received this notification from Korea Zinc on the same day.

Young Poong, due to a shortage of its own processing facilities, has long delegated the processing of half of its annual sulfuric acid output of 750,000 tons to Korea Zinc via the Onsan railway and exported it through Onsan Port. The burden of processing these hazardous materials has long been a cause of tension between the two companies, with Korea Zinc stating that it no longer had the capacity to accept sulfuric acid deliveries at the Onsan Smelter due to increased production, nor could it continue to manage the risks associated with the transport and management of these hazardous materials. Young Poong has strongly opposed this decision, arguing that it currently has no alternative means to process the sulfuric acid. Ultimately, the environmental authorities' ruling prohibiting this seems to have finally brought this conflict to a close.

This comes off the back of the Supreme Court of Korea ordering Young Poong in November last year to suspend operations at its Seokpo Smelter for 58 days from February 26 to April 24 of this year due to wastewater discharge violations under the Water Environment Conservation Act**. Industry insiders estimate that proper operations at the smelter may not be possible for at least four months.

As the situation develops, stakeholders are watching for broader impacts on the zinc market. Any production disruptions could destabilize the domestic industrial ecosystem and potentially lead to a supply crisis.

* MBN, Young Poong no longer able to process sulfuric acid at Korea Zinc, further compounding production problems following their suspension of operations
** Money S, Young Poong'z zinc production suffers a blow as the authorities suspend Korea Zinc from processing sulfuric acid on their behalf

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