Korea Zinc eyes green zinc by 2025 amid longer-term hydrogen export plans

Sun Metals' solar farm adjacent to its zinc refinery near Townsville, Queensland. Source: Ark Energy

Korea Zinc Co. Ltd., the world's largest zinc and lead smelter, is fast-tracking its decarbonization efforts to produce "green zinc" in Australia as early as 2025, according to the head of its new subsidiary Down Under.

Korea Zinc established Australian unit Ark Energy Corp. Pty. Ltd. in January, with a mandate to decarbonize the Korean group's energy supply, starting with Sun Metals Corp. Pty. Ltd., whose zinc refinery in Townsville, North Queensland, was commissioned in 1999.

Sun Metals produced 228,000 tonnes of zinc in 2020, and the refinery is undergoing a A$455 million expansion to lift production to 300,000 t/y, according to an Oct. 5 presentation by Ark Energy CEO Daniel Kim on the online Australia-Korea New Energy Forum. This will place it in the top 10 of global zinc producers, from 17th currently.

With 1.3 million megawatt-hours of annual electricity consumption, Sun Metals is an "extreme user of electricity" and Queensland's second-largest single-site consumer of electricity, Kim said.

Electrolysis, the fundamental process of refining zinc, makes up more than half of Sun Metals' operating expenses when the cost of the zinc ore is taken out, Kim added.

This underlines why it was such a "bold step" when Sun Metals joined the Climate Group-led RE100 initiative in November 2020 with a commitment to power its operations with 100% renewable electricity by 2040, with an interim target of 80% by 2030, Kim said.

Korea Zinc joined RE100 in September and committed to powering its entire global operations from renewable energy by 2050.

Co-located at the refinery is a 124-MW solar farm, which was Australia's largest integrated industrial-use solar farm when built in 2018. The solar farm, which has a behind-the-meter connection and is also grid-connected, will supply 22% of the expanded refinery's power requirements, Kim said.

In March, Ark Energy acquired 30% of Acciona SA's 924-MW MacIntyre wind farm in Queensland, which will be the largest wind farm in the Southern Hemisphere once fully commissioned by 2025 at a cost of A$1.5 billion, the CEO said.

"McIntyre, through our equity off-take, will supply 63% of Sun Metals' electricity needs. When you combine that generation profile of both solar and wind across a 24-hour period, by the end of 2024 we'll be 85% green for Sun Metals, and between now and then we have a number of options to plug that gap," Kim said. "We are on track to get to green zinc well ahead of our RE100 commitments and potentially as early as 2025."

These efforts are important to combat climate change and are "smart" business to remain competitive as a preferred supplier, given "we are seeing an emerging potential for a market premium for green industrial products," Kim said.

"We've noticed that some customers in the U.S. and Europe are already paying a US$5 to US$10 per tonne premium for green aluminum," Kim said.

"We are also seeing our customers who are on increasingly urgent mandates to decarbonize and drastically reduce emissions, both directly in their operations and indirectly across their supply chains. We've seen them increasingly hardwire sustainability into their procurement policies," Kim said.

Though Kim also flagged recent steps in the European Union to propose the Carbon Border Adjustment Mechanisms imposing carbon taxes on imported products, "green zinc is about ensuring we remain competitive irrespective of any potential changes in the regulatory landscape overseas, and potentially even at home," Kim said.

Green hydrogen export

Beyond green nonferrous metals, Kim also spelled out Korea Zinc's plans to produce green hydrogen with a number of investments already underway in upstream, midstream and downstream applications with U.S. hydrogen mobility company Hyzon Motors Inc.

To this end, Ark Energy is now spearheading Korea Zinc's efforts around the development of the SunHQ Hydrogen Hub, which will see hydrogen production — mainly for heavy vehicle diesel fuel displacement — located within the precinct that hosts Sun Metals' zinc refinery, 15 kilometers from the Port of Townsville.

Korea Zinc's "phased approach" to hydrogen exports will initially be a 1-MW electrolyzer to produce 140 t/y of hydrogen, to be commissioned in 2022, within the SunHQ hub that will be outside the secure gate of the refinery, allowing the opportunity to supply off-take to third parties, Kim said.

The CEO spelled out four phases, the last of which involves an "epic" renewable energy load of between 7,700 MW to 8,800 MW to produce over 500,000 t/y of hydrogen production by between 2035 and 2040, more than half Queensland's current installed capacity, for export to Asia and to be used domestically in Australia.

"We want to be one of the most competitive producers of green hydrogen globally," Kim said. "We talk about being an 'extreme user' of hydrogen — that is, making it pervasive across the group's businesses — but also a demand creator of hydrogen in the market."