There was a time when you put your hand in your pocket and found a few coins. These days it finds a smartphone instead. Either way, that cool touch at your fingertips came, in the end, from under the ground. Copper and nickel and zinc — metals with more names we don't know than names we do. A journey back up a chain always ends in the same place. The ground. Semiconductors, batteries, plastics — all of them are made, finally, from something dug out of the earth. This trip goes to that very bottom, the world of minerals and raw materials. And down here runs one of the strangest flows of money in any chain we have seen.
The mine pays the smelter.
The Fee That Flows Backward
In an ordinary chain, the ones below pay the ones above. But in the world of minerals, the mine that digs the ore pays a processing fee to the smelter that turns that ore into metal. This payment, called the treatment charge (TC), is a thermometer showing how precious the smelting link is. And in the past few years, the thermometer froze. As China expanded its smelters at a ferocious pace, a scramble for ore broke out, and the benchmark treatment charge for zinc smelting collapsed from $274 a ton to $80. In the spot market it finally went negative — smelters actually paying mines a premium to take their ore.
The price of the smelting link had, in effect, evaporated. By that logic, the company with the world's largest smelter should be going under. What happened was the exact opposite.
The Company That Earns Even as the Fee Collapses
In Onsan, Ulsan, stands a plant that produces more zinc and lead than any other single smelter in the world. Korea Zinc. Its 2025 report card reads like this.
| Korea Zinc (FY2025) | Value |
|---|
| Revenue | 16,581.2 billion won (+37.6%) |
| Operating profit | 1,232.4 billion won (+70.3%) — all-time high |
| Record | 44 consecutive years of operating profit |
A record profit in the very year the fee for its core business fell below half. The secret is inside the ore. Zinc ore does not contain only zinc. Gold and silver, copper, antimony, indium and other metals are mixed in in trace amounts, and Korea Zinc scrapes metal out of ore at up to 98.5% recovery, pulling out more than twenty metals at once. Even with the fee gone, the silver and gold scraped from what others throw away fill in the profit. As it happened, silver jumped more than 140% in 2025 alone, resetting its highest price in 45 years. The proposition of Part 3 is proven here once more. Value pools at the narrowest link — and in this chain, the narrowest link was not smelting itself but the recovery technology that scrapes even the dregs.
As an aside, this was the first time I properly looked up what zinc is actually used for. The largest share, it turns out, is galvanizing — plating iron so it doesn't rust. Streetlight poles, highway guardrails, corrugated tin roofs. Zinc, in other words, is not a metal that stands out but a metal that corrodes away first so that other metals are spared. There is even a use with the somewhat solemn name of sacrificial anode. Such, mostly, is the fate of what comes up from the bottom of the chain. It is everywhere, and nobody calls it by name.
The Minerals Beneath Our Feet
But wait. What, exactly, lies under our own ground? The answer is a little forlorn. The story of Korean mining now comes down to two words: closed mines, and limestone.
Coal first. Hwasun in 2023, Jangseong in 2024, and then Dogye in June 2025. As Korea Coal Corporation's last collieries closed one after another, an entire era ended whole. The country now has exactly one coal mine left, privately run. A reader who has been with this book from the beginning will remember: the first wall of this series, Kangwon Land in Jeongseon, was born on precisely that ground of closed mines. Where coal died, the law raised a wall called a casino, and it was at that wall that this long journey began. Only after descending to the chain's very bottom does the backdrop of the first chapter finally complete itself.
After coal's departure, what accounts for most of domestic mining is limestone. This white rock, carved out of the mountains of Gangwon and North Chungcheong, becomes the gray powder of the cement companies we saw earlier. This is why the cement plants cluster, of all places, in Gangwon. A country that imports nearly all its metals and quarries stone: that is the present address of what lies beneath our feet. And then, recently, an unexpected light came on in this forlorn map. The Sangdong mine in Yeongwol, Gangwon — once a world-class tungsten mine, asleep for 32 years — has opened its doors again. What woke it was not Korea but American capital, and the reason was China's blockade of tungsten exports. It means we live in an age that resurrects even dead mines. Who resurrects them, and why. That answer is the next part of this chapter.
Where the State Grips the Link
At this very bottom, there is one more hand that sets the price. The state.
Starting in 2023, China placed gallium and germanium, graphite, antimony, tungsten, and rare earths on its export-control lists, one after another. The United States slapped tariffs on copper and then lifted them, swinging the price by 20% in a single day. Korea's imports of critical minerals lean on China for 80–90%, depending on the item. As lithium did in the battery chain and shale did in petrochemicals, the bottom link of the chain is now gripped and shaken not by companies but by states. And in that turn of events, Korea Zinc's standing has changed. The company is the only domestic producer of antimony, indium, and bismuth — one of the Western world's few non-Chinese suppliers. A plan is under way to build a large smelter in Tennessee as a joint venture with US government participation, and in the process the American side has come to hold roughly 10% of the company's shares. The balance weight in a management dispute now running into its several years sits, in effect, in hands across the Pacific. In the age of minerals, a single smelter becomes a piece on the diplomatic board.
The Old Craft of Those Who Cannot Name a Price
Down here lives another breed of company: the trading houses that buy, carry, and sell minerals and grain and energy. POSCO International and LX International. Their books give the most honest answer to this book's question — "Can this company name its own price?"
| Trading houses (FY2025) | Revenue | Operating profit | Note |
|---|
| POSCO International | 32,373.6 billion won | 1,165.3 billion won (+4.3%) | All-time high · one-third of profit from the Myanmar gas field |
| LX International | 16,706.3 billion won | 292.2 billion won (-40.3%) | Profit evaporated as coal prices fell |
The whole essence of the trading business is in this table. Revenue is enormous, and the margin on trading itself is 1–2%. Move 100 won's worth, keep a little over 1. And when coal prices fell, 40% of LX International's annual operating profit evaporated in a year. The market sets the price, and the trading house merely glides thinly across its surface. Conversely, the secret behind POSCO International's record profit is not trading either. Of its trillion won of annual profit, a third comes from a single gas field in Myanmar — a legacy left behind by the old Daewoo trading men. LX bought a nickel mine in Indonesia. Those who cannot name a price answer, in the end, by buying stakes in the links that can. You might even say the trading houses are, little by little, ceasing to be trading houses.
The Money One Person Turns — The People Who Don't Leave
What shows these two essences most clearly is not the company but the numbers broken down to the single person.
| Company | Employees | Average annual pay | Average tenure | Revenue per employee | Operating profit per employee |
|---|
| Korea Zinc (smelting) | About 2,120 | About 111 million won | 12.3 years | About 7.8 billion won | About 580 million won |
| POSCO International (trading) | About 1,930 | About 140 million won | 13.1 years | About 17 billion won | About 600 million won |
| LX International (trading) | About 450 | Around 100 million won | 8.6 years | About 37 billion won | About 650 million won |
* Per-employee figures are rough estimates: consolidated results divided by parent-company headcount.
Stare at this table for a moment and something odd emerges. The profit one person generates is roughly the same at all three companies, around 600 million won. What differs is the money that has to be turned over to make that 600 million. One person at the smelter handles 7.8 billion and keeps that share; one person at a trading house must turn 37 billion to keep the same. Five times the volume, on margins five times thinner. This is the essence of the trading business. Those without a wall must squeeze out, with volume and information and credit, the same result that those with a wall get from the wall. And as LX's profit evaporating 40% in a single year shows, the acrobatics shake whenever the market shakes. If what protects the smelter's margin is the technological wall of 98.5% recovery, what protects the trading man's margin is nothing but his own sense of balance.
And yet at all three companies, pay hovers over the 100 million mark, and people stay around a decade. Picture, especially, the LX office where one person turns 37 billion won, and an odd feeling comes over you. Sliding bare across the world's markets, without a wall, turns out to be — for the person actually doing it — a rather snug place to work. Beside the Onsan smelter that has not known a deficit in half a century, and at the Yeouido-style trading desks turning tens of billions, people stay a long time. The wall at the very bottom, and the wall-less acrobatics: both, in the end, are held up by time and by people.
With this, we have come all the way down to the bottom of the chain. We have seen, in turn, chains where value scatters and chains where it pools, chains that leak upstream and chains gripped by the state. What I learned by coming down is that the ground beneath our feet is emptier than I had thought. A country of closed mines and limestone. I finger the smartphone in my pocket again. Of the metals inside it, almost none will have come from our ground. Whether that is something to be forlorn about, or merely a matter of geography, I am still postponing judgment. One question remains. What, then, becomes of the one who holds every link of the chain in his hands? Having all the places where value pools, he ought to be the richest of all — and there is a place where the reality is the reverse. The last journey is the story of a group that held production, distribution, exhibition, and broadcasting all at once, and collapsed.
This piece is part of the "Korea Value Chain" series and is an original work. It is an analysis based on public data and industry sources; some figures and assessments are estimates. It is not intended as a direct basis for investment decisions.
By Alexandro Lee · July 2026
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