Korea Zinc 披露上半年业绩，白银销售占比大幅抬升

Korea Zinc (010130.KS) posted record first-half earnings, driven by expanded sales of silver, a byproduct generated during the smelting of zinc concentrate. As demand rose in advanced industries such as semiconductors, electric vehicles and batteries, and silver prices soared in the first quarter, silver—once a mere byproduct—has emerged as a revenue source surpassing the company's core zinc and lead businesses.
According to the Financial Supervisory Service on the 6th, Korea Zinc's consolidated first-half revenue was preliminarily tallied at 12.445 trillion won, with operating profit of 1.333 trillion won, up 62.5% and 151.5%, respectively, from the same period last year. Among product sales, silver stands out. Korea Zinc's first-half silver sales reached approximately 4.108 trillion won, a surge of 170.4% from 1.519 trillion won a year earlier.
Interestingly, there is no silver mine in Ulsan, where Korea Zinc's Onsan smelter is located. The secret to achieving such results in a region without any mines lies in the company's raw material processing technology. "We bring in lead concentrate, from which lead is extracted, and zinc concentrate, and the lead concentrate contains a relatively large amount of silver," a Korea Zinc official said. "Silver typically accounts for about 30% of total revenue in normal times, but as silver prices surged in the first quarter, the proportion rose to the 40% range. Prices fell somewhat in the second quarter but remained high, so sales grew significantly," the official added.
Korea Zinc's ability to recover metals from raw materials is far higher than that of its competitors. In the case of silver, the company is known to record a recovery rate in the high 90% range. Thanks to this recovery competitiveness, its earnings before interest, taxes, depreciation and amortization (EBITDA) improves by 5-6% for every $10 rise in silver prices per ounce—the highest profit sensitivity among peers. Under the same conditions, global mining company South32 stands at 3.0% and Glencore at 1.1%, while BHP, Harmony Gold, Gold Fields and AngloGold fall short of 1%.
The foundation of Korea Zinc's competitiveness lies in continuous investment in technology and facilities, analysts said. Some 30 to 40 years ago, Korea Zinc turned its attention to technology for extracting metals such as gold and silver from the residue left after smelting zinc and lead. After introducing residue reprocessing facilities in 1992, the company continuously upgraded its technology and raised the smelting residue recovery rate to nearly 100%.
Chairman Chey Yun-beom, who took office in 2022, has pursued a "Troika Drive" strategy centered on renewable energy, secondary battery materials and resource recycling, focusing on process upgrades and research and development (R&D). The company continues to expand its recovery technology, investing more than 120 billion won to build a resource recycling process that treats electronic waste and copper scrap to extract 35,000 tons of secondary battery materials annually.
These investments created explosive synergy amid structural changes in the market. Since late last year, silver demand has risen in key industries such as semiconductors, data centers, artificial intelligence (AI) infrastructure and solar power, while the possibility of China tightening controls on silver exports for electronics and semiconductors added fuel to the demand increase. In fact, the global silver market has recorded supply shortages for five consecutive years since 2021, with this year's shortfall projected to reach 46 million ounces.
As a result, the composition of sales by product has changed significantly. In 2021, zinc and lead accounted for 48.6% of Korea Zinc's revenue (zinc 31.8%, lead 16.8%), while silver and gold accounted for 41.8% (silver 29.0%, gold 12.8%). In the first half of this year, silver made up 49.3% and gold 14.7%, together accounting for 64.0% and far surpassing the combined share of zinc and lead (27.3%).
The company is also accelerating the advancement of its rare metals business, including germanium and indium. Germanium, a key material for defense, space and optical communications, saw its price surge from $3,000 per kilogram in the first quarter to $11,000 in the second quarter due to China's export controls. Korea Zinc plans to begin intermediate product output early this month through its subsidiary KEMCO and start full-scale sales next year. "Following a long-term supply memorandum of understanding (MOU) signed with U.S.-based Lockheed Martin last year, we are in talks with major customers on long-term purchase contracts," Korea Zinc said.