The ongoing power struggle at Korea Zinc, the world's largest zinc smelter, looks to be taking an unexpected turn, as the CEO of Trafigura, one of Korea Zinc's key partners and strategic investors, prepares to visit Seoul next month.

According to local investment industry sources on Friday, Trafigura CEO Jeremy Weir, accompanied by his successor Richard Holtum -- who will assume the CEO role in January 2025 -- will meet with Korea Zinc Chairman Choi Yun-beom during the visit.

Korea Zinc has confirmed the trip, stating, "Trafigura's visit to Korea has been confirmed for next month. They will meet with Chairman Choi to discuss ways to enhance cooperation."

The visit comes amid an escalating ownership dispute with Choi and the current management of Korea Zinc vying against the alliance of major shareholder Young Poong and private equity firm MBK Partners.

Industry speculation suggests that Choi and Weir will discuss ways to strengthen their partnership during the upcoming visit, potentially through treasury share purchases or stake exchanges, as Trafigura seeks to bolster its support for Korea Zinc amid the escalating feud with Young Poong.

Trafigura, one of the world’s largest commodity traders based in Singapore, has maintained a longstanding partnership with Korea Zinc. This relationship deepened in 2022 when Trafigura made a strategic investment of 200 billion won ($146 million), acquiring a 1.49 percent stake in the company. The move came as Choi sought to rally friendly stakeholders in preparation for his showdown with Young Poong.

Trafigura's collaborations underscore its backing for Korea Zinc’s current leadership. In November 2023, Trafigura signed an investment agreement worth 185 billion won with Korea Zinc subsidiary Kemco to develop a nickel smelter in Ulsan, additionally securing a long-term contract to supply an extra 20,000 to 40,000 tons of nickel raw materials annually to Korea Zinc.

The partnership came as part of the Korean smelter's "Troika Drive" strategy, spearheaded by the chairman, which focuses on expanding into renewable energy, battery production and resource recycling. Alongside Trafigura, major energy firms such as LG Chem and Hanwha, as well as investment institutions like Morgan Stanley and Korea Investment & Securities, have shown their commitment to this vision by investing in Korea Zinc through treasury share swaps.

On Thursday, the dispute escalated as the Young Poong-MBK coalition confirmed it had secured an additional 5.34 percent stake in Korea Zinc through its recent tender offer, raising its total to 38.47 percent.

This places them ahead of the combined 33.99 percent stake held by Choi and his allies. Even with the additional 2.5 percent he could potentially acquire through the ongoing counter buyback, Choi's total would only extend to 36.49 percent, still trailing Young Poong-MBK's 38.47 percent.

Industry watchers anticipate the 7.83 percent stake held by National Pension Service to play a deciding role. While the NPS remains aloof on the ownership feud, the institution had been largely supportive of the current leadership, including in the shareholders meeting in March.

Meanwhile, Korea Zinc filed a complaint with the Financial Supervisory Service on Thursday, alleging possible market manipulation by MBK Partners. On the final day of MBK's tender offer, Korea Zinc's share price peaked at 820,000 won around 1 p.m., but fell to a low of 779,000 won within about two hours. Citing a sharp increase in selling volume around the peak, Korea Zinc contended that there may have been intentional price manipulation to lower the stock price.

MBK Partners denied these allegations.

The legal dispute stemming from Young Poong and MBK's injunction to halt Korea Zinc's ongoing share buyback is also noteworthy. Following an initial failed attempt, the coalition filed another injunction, alleging breach of fiduciary duty and procedural illegality by Korea Zinc's board during the tender offer. The court is expected to announce its decision Monday at the earliest.