Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (187447)	5/12/2025 1:06:41 PM
From: LoneClone	Read Replies (2) \| Respond to of 192380

Column: A gallium lens on China’s minerals dominance and how to break it: Andy Home reuters.com Reuters \| May 11, 2025 \| 6:23 am Critical Minerals Markets China USA Aluminum Bauxite Specialty Minerals The price of gallium has been rising ever since China started restricting exports of the exotic metal in August 2023. This is not surprising since China has a near monopoly on global gallium production, just as it does across the critical materials spectrum. How much should we care that the price of something most people have never heard of is trading at 14-year highs? After all, global production last year was just 760 metric tons, according to the United States Geological Survey (USGS). Even at today’s elevated prices the world market’s nominal value is a modest $550 million. The metal is used in such tiny quantities that there is zero impact on the cost of a mobile phone or an electric vehicle. However, if you’re in the semiconductor business it matters a lot. And it matters even more to US defence planners, which is why China chose element number 31 as a metallic pressure point in the first place. European and Chinese gallium prices The multiplier effect Because gallium is used in so many modern technological gadgets, there is a multiplier effect to the economic cost of China’s export restrictions. The USGS estimates that a one-year suspension of Chinese gallium exports would translate into a $3.1 billion hit to the US economy. China’s germanium, gallium ban could cost the US $3.4 billion Around half of the decrease would come from the semiconductor sector and the other half from a range of downstream industries such as printed circuit assembly, computers and electric vehicles. China hasn’t totally suspended exports, although it has banned direct sales to the United States. But outbound flows have slowed since the dual-use regulations were introduced in 2023. Moreover, the USGS’s projections were based on an assumption that the gallium price would rise by a factor of more than 2.5 in the event of a complete export halt. The reality is that the gallium price has more than doubled from $350 per kilogram in July 2023 to $725 and is still rising. The Chinese price, by contrast, is falling as more gallium stays in the domestic market. Physical arbitrage would at other times close the pricing gap but not with China’s Ministry of Commerce guarding the gate. USGS report on Chinese gallium export controls The military angle Gallium’s significance to US military planners is greater still. Indeed, it was the US Defense Advanced Research Projects Agency (DARPA) that helped develop a compound called gallium arsenide, used in radar and precision-guided weapons, and more recently nurtured the next-generation gallium nitride semiconductor chip. The latter is “revolutionizing modern radar, allowing new radar modules to track smaller, faster, and more numerous threats from nearly double the distance,” according to The Center for Strategic and International Studies, a non-profit policy research organization. Gallium nitride-enhanced radars are being deployed in the US Army’s Lower-Tier Air and Missile Defense Sensor (LTAMDS), an integral part of Patriot missile defense units, and the F-35 Joint Strike Fighter. And there’s probably a whole lot more that we don’t know about. Gallium is typical of many critical metals in that its small market size belies an extraordinarily diverse array of applications, many of them at the cutting edge of semiconductor design. Which is why it’s no coincidence that China announced its export controls in direct response to US restrictions on next-generation semiconductor chips to China. The China challenge Can the West break China’s grip on the gallium market? The solution is already at hand, or rather in the tailings pond. Gallium is not particularly rare in the earth’s surface but only occurs in sufficient concentrations to extract as a by-product of other minerals, particularly bauxite. China’s gallium supremacy has grown alongside its massive build-out of aluminum capacity. The country accounts for 60% of global aluminum output and all that metal needs alumina, which is processed from bauxite. China’s alumina refineries aren’t the only ones that can generate gallium. It’s just that Western companies stopped doing so after China flooded the market at the start of the last decade. That’s changing. Rio Tinto and Indium Corporation have just announced the successful extraction of pure gallium from what was previously a waste stream at Rio’s Vaudreuil alumina refinery in Quebec. The next stage will be a pilot plant with capacity of 3.5 tons per year. Greek aluminum producer METLEN is planning to produce 50 tons per year by 2028 as part of a project to lift bauxite and alumina processing capacity. It is one of the European Union’s 47 strategic minerals projects. There are two key takeaways here for other critical mineral markets being squeezed by Chinese export controls. Firstly, there is a good chance that the West is already producing many of them but has failed until now to appreciate the value of what was deemed part of the metals processing waste scheme. Rio Tinto, for example, has also started extracting scandium from its titanium operations in Quebec and tellurium from its Kennecott copper smelter in Utah. Rio Tinto becomes first North American producer of scandium oxide Both had been operating for many years without anyone thinking it worthwhile to separate out the critical metals in the waste stream.