One of Australia’s biggest and most prominent renewable energy developers, Ark Energy, says it fears for its future and is fighting a bid for its parent company launched by a competitor that it says has a poor environmental record and is accused of being a serial polluter.
Ark Energy is an Australian subsidiary – along with Townsville refinery owner Sun Metals – of Korea Zinc, and has been at the forefront of many key developments in Australia’s renewable energy industry.
It and Sun Metals were behind the push for five minute settlements in the wholesale electricity market, which has opened the way for battery storage facilities to be competitive, and it installed Australia’s first and largest embedded solar farm (121 MW) at the Townsville refinery.
It also has another 13 large scale renewable projects in development across Queensland, NSW and Tasmania, with a total portfolio of more than 9 GW worth more than $20 billion, and is backing the crucial $5 billion plus CopperString 2.0 transmission link, along with two green hydrogen projects.
Its key projects include one of Australia’s biggest battery projects, the 2,200 MWh Richmond Valley battery that will be the biggest eight hour battery in the world, and it is a 30 per cent shareholder in the country’s biggest single wind project, the newly connected 923 MW Macintyre wind farm in Queensland.
Its leadership team issued an extraordinary statement on Tuesday, slamming the bid for Korea Zinc by its fellow metals producer Young Poong, which is being backed by a Chinese-controlled private equity firm MBK Partners.
Young Poong is already a shareholder in Korea Zinc, with a 25.4 per cent stake, and with MBK is seeking a controlling shareholding of around 40 per cent. That would cost the two companies around $1.5 billion and value Korean Zinc at about $10 billion.
But the Australian management says the bidder has a poor reputation, with its CEO arrested last month over a fatal accident last year at its own Korean zinc smelter, and the company has been slammed by ethical investors for its poor environmental and safety record.
Ark Energy CEO Michael Choi also fears the unwanted bidder will dispose of the renewable energy assets, and that as a result many of its projects in Australia will not go ahead.
“Management for Korea Zinc and its Australian subsidiaries including Ark Energy do not support this bid and consider the prospective change in leadership is not in the interests of the company,” Choi said in a statement.
“Renewable energy development, especially renewable hydrogen, requires courage, commitment and significant investment. Korea Zinc is focused on strategic and technological innovation, and decarbonising as quickly as possible, so we are investing heavily in the long game.
“Development and operation of refining, renewable energy and hydrogen assets requires the highest standards for safety, responsible corporate citizenship and environmental management. Young Poong’s track record does not reflect that it holds the same values and priorities.”
Ark Energy cited safety and environmental issues at Young Poong’s Seokpo smelter in South Korea, and its exclusion from the portfolio of the Norwegian Government Pension Fund Global because of its “long-term and substantial pollution and harm to human health and the environment.”
Choi’s concerns were echoed by Joseph O’Brien, the co-founder of the Copperstring 2.0 project and a board member of the Queensland Renewable Energy Council.
He said a change in direction from Korea Zinc could have significant impacts on renewables investment in Queensland.
“Korea Zinc, through Sun Metals and Ark Energy, has been a positive contributor from their early days trading in the National Electricity Market to improve their zinc refining process efficiency, to the largest embedded solar generation in Australia, their support of CopperString and their investment in hydrogen,” he said.
“We need corporate citizens like this in our minerals and clean energy industries if we want to achieve our economic and environmental objectives.”
Ark Energy’s other projects include two green hydrogen projects in Queensland, and the Bowmans Creek wind farm in Queensland, although it has recently withdrawn its Wooroora wind project in Queensland, and dropped its Doughboy wind project in NSW after a “change of mind” from some of its proposed landowners.
It’s not clear what Korea Zinc can do to stand in the way of a change of control. MBK Partners said in a statement reported by Reuters that Korea Zinc, as a company, must remain neutral when there is a dispute between shareholders, and added that its board was failing to function normally.
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