Trafigura and Korea Zinc agree to build nickel refinery in South Korea

Global commodity trader Trafigura on Friday said it has signed a $140 million investment agreement with Korea Zinc to build an all-in-one nickel refinery in Ulsan, South Korea, and finance its initial working capital.

The refinery will be capable of processing a range of feedstocks including nickel matte and mixed hydroxide precipitate (MHP) using an integrated pyro-hydro process, the release said.

Korea Zinc is set to establish the refinery through its nickel sulfate subsidiary, Korea Energy Materials (KEMCO) and Trafigura will secure a 12.9% stake in KEMCO as part of the agreement.

The two companies also entered a long-term agreement to secure a reliable supply of feedstock for the refinery.

Under the contract, the amount of nickel to be supplied by Trafigura will range from about 20,000-40,000 metric tons per annum and the company will also have an off-take right in relation to the feedstock contract.

(By Ashitha Shivaprasad and Swati Verma; Editing by David Goodman)