The owner of the world’s largest zinc mine is in discussions to reroute output of the US operation away from China due to the trade war between Washington and Beijing, according to people familiar with the matter.

Teck Resources’ Red Dog mine, some 170 km inside the Arctic Circle, accounts for about 5% of global zinc supply and 2.5% of lead. China is the world’s largest consumer of the two metals by far. More than 20% of Teck’s mined zinc production is sold to Chinese smelters including Nanfang Nonferrous Metals Group and China Minmetals Corp’s Zhuzhou Smelter Group.

While global demand for zinc and lead concentrates is strong, rerouting supplies from a mine as big as Red Dog could prove to be a major logistical challenge. The deposit is so large that the annual deals Teck signs for its output are used as a global pricing benchmark for the rest of the industry.

Shipments from the Alaskan mine are being caught up in a trade dispute between the world’s two largest economies, after Beijing imposed tariffs last month on American goods in retaliation for US levies on China. Teck executives immediately held calls with Chinese clients after tariffs were announced, and buyers told the company that they’re reluctant to pay the full levies for upcoming Red Dog shipments, said the people, who asked not to be identified as they aren’t authorized to speak publicly.

“Given the levels of tariffs being placed on imports from the US into China, that creates challenges with supply at the moment,” Teck’s CEO Jonathan Price told investors during an April 24 earnings call.

In a bid to resolve the impasse, members of Teck’s commercial team recently flew to China to visit key clients and renegotiate their sales contracts, the people said. Options being discussed include swapping the semi-processed zinc ores known as concentrates produced at Red Dog with supplies from Teck’s non-US mines, or from third parties.

“The commercial team is working very hard,” Price added. “There’s a range of options and alternatives here, which could see us placing material elsewhere through this period of time.”

It is not the first time that Red Dog concentrates have been ensnared by the US-China trade war. During US President Donald Trump’s first administration, China put 25% and 10% import tariffs on US-origin zinc and lead concentrates, respectively.

Back then, Red Dog’s output still ended up making its way to China, as Teck and its customers agreed to share the costs of the tariffs, the people said. But the chances of a similar deal look slim with supplies now being levied at much higher levels.

One silver lining is that Teck still has time on its side: Red Dog will only start shipping in summer, once the surrounding sea ice melts, and migrating caribous are not crossing the port roads. Once the passage is clear, Teck will need to ship out its entire annual production — which is worth about $2 billion — within about four months, before the long winter sets in again.

A Teck spokesperson declined to comment on specific commercial negotiations, but said shipments won’t begin until July. Zinc concentrates are in high demand, and the company has developed a regionally diverse customer base, giving greater optionality while trade discussions are ongoing, the representative said.

Representatives for Nanfang and Zhuzhou Smelter Group didn’t reply to requests for comment.