“WE’RE IN A METALS WAR!”: US DEPT OF WAR & JPM TO BUILD US SILVER REFINERY TO PROCESS LATAM METALS

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Landmark US Smelter Deal Poised to Boost US Access to Silver Amid Critical Minerals War With China
Refinery Deal Was Already in Place Before US Moved to Oust Maduro, & Seize Venezuela’s Critical Minerals

Clarksville, Tennessee – January 5, 2026

In a move set to reshape the landscape of critical minerals production, South Korea’s Korea Zinc has announced a massive $7.4 billion investment in a new state-of-the-art smelter in the United States, including the acquisition of Nyrstar’s US operations. The deal, which involves partnerships with the U.S. Department of Defense and Department of Commerce, aims to produce 13 essential nonferrous metals from recycled electronic scrap and industrial byproducts, with significant implications for the silver market both domestically and globally. (Source)

The project centers on Clarksville, Tennessee, where Korea Zinc plans to build a 650,000-square-meter facility on the site of the existing Nyrstar zinc smelter. This includes acquiring Nyrstar USA’s assets, such as the Clarksville smelter—the only primary zinc producer in the U.S.—and operations in nearby Gordonsville.

The total investment comprises $6.6 billion in capital expenditures, supplemented by working capital and financing, with commercial operations phased in starting 2029.
The U.S. government is providing substantial backing, including $1.4 billion from the Department of War and $210 million under the CHIPS Act from the Department of Commerce, underscoring the strategic importance of diversifying supply chains away from geopolitical risks.

Of perhaps even more interest, the US Department of War will own a 40% stake in the venture, with precious metals behemoth JP Morgan providing additional financing. 


Among the 13 metals targeted for production—ranging from base metals like zinc, lead, and copper to strategic minerals such as antimony, indium, and germanium—silver stands out as a key precious metal output.

The smelter will process approximately 1.1 million tons of raw materials annually, including electronic waste like printed circuit boards, to yield 540,000 tons of finished products.

While exact production volumes for silver have not been disclosed, industry experts anticipate the facility could add several million ounces to annual output, given silver’s prevalence in e-scrap and as a by-product in zinc and lead refining.

Coincidental Timing That US Smelter Announced the Day After U.S. Takes Control Over Venezuelan Minerals?

The Korea Zinc smelter project gains even greater geopolitical weight in light of the U.S. military’s recent capture of Venezuelan President Nicolás Maduro on January 3, 2026, which has paved the way for Washington to assert control over Venezuela’s extensive mineral wealth, including critical resources like gold, coltan, bauxite, and silver-associated ores.

As U.S. forces move to secure Venezuelan assets amid the power vacuum, industry analysts suggest the Tennessee facility could serve as a key hub for processing these seized materials, integrating them into domestic supply chains for silver and other metals essential to defense and clean energy sectors.

This alignment not only mitigates risks from foreign dependencies but could help the US build a new Strategic Silver Stockpile from Latin American sources, advancing U.S. strategic interests in an escalating critical mineral war against China.

Maduro should have learned the lesson given to Iraq’s Saddam Hussein & Libya’s Gaddafi. 
Maduro’s days were numbered the moment he began selling Venezuela’s oil for yuan instead of US dollars.  

Now, not only Venezuela’s massive oil reserves, but also its gold, silver, & other critical minerals will be controlled by the US. 

Domestic Implications for the US Silver Market

In the United States, where silver production has hovered around 30-40 million ounces annually from primary and secondary sources, the Korea Zinc smelter represents a significant boost to domestic recycling capacity.

Currently, the U.S. relies heavily on imports for silver, with domestic supply meeting only a fraction of demand driven by industries like solar photovoltaics, electronics, and electric vehicles.

Chinese refineries account for 60-70% of global supply, and China’s move to restrict exports of silver beginning January 1 was effectively an act of financial war against the US that President Trump immediately responded to.  

The new facility’s focus on recycled content should enhance supply chain resilience, ensuring US access to critical and strategic minerals in the face of increased Chinese aggression.

Economically, the project is expected to create 750 jobs in Tennessee, revitalizing local manufacturing and positioning the U.S. as a hub for critical minerals processing.

For the silver market specifically, increased domestic production may stabilize prices for U.S. consumers and manufacturers, potentially lowering costs for silver-intensive applications such as conductive pastes in solar panels and semiconductors. Analysts suggest this could encourage further investment in U.S.-based recycling infrastructure, aligning with national security goals to onshore production of strategic materials.

The deal also grants the U.S. government an option to acquire up to a 34.5% stake, ensuring American influence over output and prioritizing domestic needs.

This comes at a time when silver demand is surging due to massive shortages of physical silver due to investment demand along with the clean energy movement, with the Silver Institute projecting global industrial demand to reach record highs in 2026.

Global Ramifications for Silver Supply and Pricing

On the international stage, Korea Zinc’s expansion into the U.S. could modestly increase global silver supply, which totaled about 830 million ounces in 2025, with roughly 20% coming from recycling.  The major implications are not regarding price, but regarding US gov’t access to strategic metals such as silver as China shifts into the next phase of its atypical warfare against the US and the West.

Geopolitically, the project diversifies global supply chains, reducing reliance on dominant producers like Mexico, Peru, and China for silver mining and refining.

By processing Latin American metals and U.S.-sourced scrap, it strengthens alliances between the U.S., South Korea, and allies, countering concentration risks in critical minerals.

“This deal is about more than metals—it’s about securing the future of advanced manufacturing,” said a U.S. Department of Commerce spokesperson in a recent statement.

As Scottsdale Mint CEO Josh Phair recently stated, “WE’RE IN A METALS WAR!”




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