Korea Zinc acquires Kataman Metals

Pedalpoint Holdings, a U.S. subsidiary of Seoul, South Korea-based nonferrous metal smelting company Korea Zinc, has purchased Kataman Metals, a global scrap metal trading company based in St. Louis, to improve its access to recycled copper.

Korea Zinc spent $55 million on the transaction, which is expected to accelerate the company's recycling and resource circulation business by providing access to a platform and expert traders with a broader and more diverse network of scrap metal feedstock sources.

Earlier this decade, Korea Zinc, through Pedal Point Holdings, took a 73.21 percent share in Igneo Technologies LLC, which is headquartered in New York, for 432.4 billion Korean won, or $330 million. Igneo recycles electronic scrap and has proprietary technology to extract intermediate materials from e-scrap that can be smelted into valuable metals.

Established in 1993, Kataman Metals trades approximately 300,000 tons of copper, aluminum, iron and other scrap raw materials annually, with sales averaging $1.5 billion over the past three years, Korea Zinc says.

The company plans to complete the expansion of its copper production facilities at its Onsan Smelter by the first half of 2025, which will require an additional 130,000 tons of copper scrap per year. Korea Zinc also plans to exclusively use secondary materials to reduce its carbon emissions, so securing a stable supply of raw materials is crucial.

In December of last year, Korea Zinc held its first “Investor Day,” outlining its plans to enhance its competitiveness in the copper smelting industry by expanding its facilities and establishing a circular system to increase the company’s annual copper production to 150,000 tons. Doing so will require procuring 300,000 tons of copper scrap annually, which is possible through Kataman’s current portfolio of scrap metal suppliers, according to a news release issued by Korea Zinc.

The purchase of Kataman Metals connects that company’s raw material procurement with Igneo's e-scrap processing technology and Korea Zinc's manufacturing capabilities. Pedalpoint Holdings will focus on stabilizing Igneo Holdings' business in 2024 and integrating Kataman Metals as a subsidiary, enhancing synergies between the businesses.

"The secondary raw material market for recycling is undergoing rapid growth,” a Korea Zinc spokesperson says in the news release. “However, the procurement and pricing systems are still unstable, with a myriad of suppliers scattered across the globe. In these market conditions, it is essential to have a group of professional traders with deep knowledge and networks to ensure a smooth supply of materials at competitive prices. The latest acquisition signifies that we have established a stable platform for sourcing scrap metals while completing the final piece of the puzzle in securing raw materials for our expanding copper production capacity—ultimately allowing us to complete a truly circular value chain."

The Brown Gibbons Lang & Cos. Metals & Advanced Metals Manufacturing investment banking team, based in Chicago, served as the exclusive buy-side financial advisor to Korea Zinc in the transaction.