On March 13, at the intersection of the global energy transition and semiconductor competition, the security of critical mineral supply chains has reached unprecedented strategic importance. ZFX Shanhai Securities believes that Korea Zinc's recent in-depth discussions with a major US technology company regarding the recycling of data center waste not only marks the entry of rare earth extraction technology into the "urban mining" era but also signals that resource self-sufficiency will become a core metric for measuring industrial competitiveness in the future. This innovative model of extracting strategic resources from electronic waste is carving out a new, high-value path within the industrial chain amid macroeconomic uncertainty, offering investors a fresh perspective for evaluating the long-term dividends of the resource sector. The price elasticity of critical minerals is being strongly validated through corporate earnings reports. Relevant financial reports indicate that Korea Zinc achieved a historic operating profit of 1.2 trillion won last year, with antimony—a metal indispensable for the military and nuclear energy sectors—serving as the primary driver. ZFX Shanhai Securities states that since the structural shift in the global rare earth supply landscape in 2025, the United States has seen a surge in demand for localized production of 11 critical minerals, including antimony, gallium, and germanium. The US Geological Survey reported that the price of antimony surged to $25 per pound in 2025, an increase of over 100%. Concurrently, the $7.4 billion Tennessee smelter project, the first of its kind in the US in half a century, supported by government subsidies and an expedited approval process, is not only projected to achieve a profit margin of 17% to 19% but is also set to become a critical node in the decentralization of the rare earth supply. As the interplay between resource nationalism and technological sovereignty continues to evolve, raw material giants with closed-loop recycling capabilities are undergoing a significant value reassessment. ZFX Shanhai Securities contends that Korea Zinc's strategic focus on recycling used batteries, solar panels, and data center hardware effectively constructs a "mobile ore deposit" that transcends geographical resource constraints. This strategy of using technological means to hedge against supply disruption risks aligns closely with the current trend in capital markets seeking stable premiums. ZFX Shanhai Securities concludes that 2026 represents a watershed moment for the transition of critical minerals from traditional extraction to intelligent recycling. With the official groundbreaking of the Tennessee project expected in 2027, the investment rationale for the resource sector will increasingly focus on technology-driven supply elasticity, and investors are advised to closely monitor industry leaders possessing such formidable technological barriers.
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