Gallium supplies face challenges amid Chinese dominance, rising prices
(MENAFN) Gallium, a critical metal used in a variety of high-tech applications from smartphones to radar equipment, has seen its market dynamics shift dramatically in recent years. Once a low-cost metal, gallium's production landscape changed in the late 2000s when many non-Asian producers exited the market due to unprofitability. Today, China has emerged as the dominant player, controlling up to 98% of the global supply of low-purity primary gallium, according to the U.S. Geological Survey. This dominance has been further solidified by Beijing’s imposition of export controls last year, which have led to a nearly doubling of gallium prices in Europe and restricted access to this essential material for various civilian and military applications.
Despite gallium's abundance as a by-product of bauxite and zinc ore, its market value has soared due to supply constraints. Historically mined in larger quantities, economic factors have turned it into a valuable resource. This shift has prompted companies such as Atalco, based in Louisiana and known as “the last operating alumina refinery in the United States,” to reconsider gallium production. Additionally, Nyrstar, owned by commodities trading group Trafigura, is evaluating the construction of a USD150 million facility at its Tennessee smelter. This facility could potentially fulfill 80% of the annual U.S. demand for gallium and germanium, another metal affected by Chinese export restrictions.
In response to these challenges, governments may need to provide financial incentives to encourage domestic production and reduce reliance on foreign sources. The U.S. Defense Production Act, designed to enhance domestic defense capabilities and reduce dependency on external supplies, represents a potential avenue for support. Other nations, including Germany, Kazakhstan, and the UK, could also re-enter the market as former producers. Additionally, alternative sources for gallium, such as extraction from coal fly ash, are being explored, though recycling remains complicated due to the presence of toxic arsenic in common compounds.
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