Korean Proxy Fight Threatens to Derail Trump’s Big Zinc Bet

The Trump administration’s investment in a US zinc development has thrust it into the middle of a South Korean proxy fight, an example of how the government’s push for equity stakes in critical industries is facing free-market blowback.

The administration announced earlier this week it struck a joint venture with Korea Zinc to back construction of a $7.4 billion smelter project in Tennessee that would bolster US production of key critical minerals. But the reaction has been mixed, with shares fluctuating as Korea Zinc’s largest shareholders balk at the structure of the deal.

The activist investors — Young Poong Corp. ...