ZincOx Resources PLC (AIM:ZOX) that its chosen operating site in Korea has been officially designated as a Foreign Investment Zone (FIZ) by Korea's Foreign Investment Committee. The designation is for the express purpose of recycling electric arc furnace dust (EAFD) by ZincOx Korea Ltd, the company's wholly owned subsidiary in the country.
ZincOx's chosen operating site for its Korean Recycling Plant (KRP) is 9.3 hectares in size and is situated at the Cheonbuk Industrial Complex (CIC) approx 10 milometres to the west of Pohang, one of Korea's major steel producing centres.
The CIC falls under the local jurisdiction of Gyeongju City and is situated in Gyeonsangbuk-Do Province. Both the Mayor of Gyeongju City and the Governor of Gyeongsangbuk-Do Province have been strong supporters of ZincOx's plans in Korea and have been instrumental in the successful outcome of ZincOx's FIZ application.
Designation of its site as an FIZ ensures that ZincOx's KRP will enjoy certain tax and other incentives available to foreign investors in Korea including a five year tax holiday. It also enables the Korean government to purchase the site and lease it back to ZincOx, which will considerably reduce the capital cost of developing a plant. The company expects a lease agreement to be finalised during the summer.
Executive chairman Andrew Woollett commented: "We are delighted to have obtained these substantial benefits and we are very grateful for the strong and dynamic support from the Korean authorities at both a local and provincial level. We look forward to concluding a lease for the site in the near future as this will critically influence the development timetable of the project."
In its preliminary results last month, ZincOx reported the re-start of the development of its Ohio Recycling Plant (ORP), at a substantially lower cost than originally planned. The company also highlighted that it had £47 million in cash reserves at the end of 2009, and it has access to project financing of US$60 million.
"We have been able to re-start our first recycling development and remain convinced that this innovative approach presents a significant opportunity to produce low cost zinc on a sustainable basis”, Woollett had commented.
The planned ORP is the company’s most advanced recycling project which will EAFD, a by-product from steel recycling processes, to produce zinc. According to ZincOx, EAFD contains about four times more zinc than the average natural deposit. EAFD generally contains between 18 and 25 percent zinc.
ZincOx has been pressing ahead with the ORP and the re-financing of the Jabali open-pit zinc mine in Jemen since receiving resounding support from its major shareholders at a general meeting earlier in April. The company’s majority shareholders dismissed proposals from dissident minority shareholders who put forward a proposal to oust six directors from the ZincOx board and pursue an alternative strategy.
ZincOx had maintined throughout that the proposals were misguided and not in the company's best interests.