The recent export bans imposed by China on gallium and germanium have sent shockwaves through the global industrial material manufacturing sector. These two metals, although not common household names, play a crucial role in various high-tech and clean energy technologies. The sudden restrictions on their export have prompted companies in the U.S. and Canada to consider ramping up production of these rare metals to meet the growing demand.
Gallium, in particular, is a key component in semiconductor chips used in a wide range of devices, including cell phones, electric vehicles, and LED lighting displays. Its unique electrical properties make it indispensable in the manufacturing of rare earth magnets for electric vehicles and wind turbines, as well as in thin film solar cells. Germanium, on the other hand, is essential for refracting light in fiber optic cables and is used in infrared lenses, semiconductor chips, and high-efficiency solar cells.
The market for gallium and germanium is small, with China currently dominating production and supply. China’s strategic focus on co-extracting these metals from common ores has given it a significant advantage in the global trade war. The recent export bans by China have raised concerns about the overreliance on a single country for the supply of critical minerals essential for a high-tech and clean energy future.
In response to these developments, companies in the U.S. and Canada are exploring ways to increase production of gallium and germanium to reduce dependence on Chinese supply. The Biden administration’s emphasis on prioritizing federal funding for critical minerals projects is seen as a positive step towards achieving greater supply chain diversification. The export bans have heightened interest in developing more resilient and diverse supply chains to ensure a stable and sustainable source of these essential metals for the future. North of the border in Ontario, Neo’s facility is gearing up to double its production of gallium, according to Tsianos. The company currently relies on scrap from the semiconductor industry for its gallium supply, which it processes to extract high-purity gallium for semiconductor manufacturing. However, Neo is exploring new sources of virgin gallium by partnering with bauxite miners worldwide. These miners would initially process the bauxite on-site and then send low-purity gallium to Neo for further refining in Canada.
In British Columbia, mining giant Teck Resources is a leading producer of germanium outside of China. The Trail Operations refinery complex processes zinc ore from Alaska’s Red Dog mine, producing roughly 20 tons of refined germanium annually. With the export ban in place, Teck is looking at increasing its production capacity for germanium to meet market demand.
Kwasi Ampofo from BloombergNEF anticipates that the U.S. may establish new supply chain relationships with countries like Canada to secure gallium and germanium in the short term. Despite the threat of tariffs on Canadian imports, Neo remains the only industrial-scale gallium facility in North America and is dedicated to serving customers in the semiconductor and renewable energy industries.
Teck acknowledges that a trade war between the U.S. and Canada would negatively impact both economies by disrupting critical mineral flows and increasing costs. While Canada may be a short-term solution, the U.S. could eventually turn to recycling, particularly of military equipment, to meet its gallium and germanium needs. The Department of Defense initiated a program to recover germanium from old military equipment, recycling up to 3 tons annually.
Umicore, a global metals company, recycles germanium from various sources at facilities in Oklahoma and Belgium. The company has been recycling germanium since the 1950s, making it a core activity. Additionally, Nyrstar in Tennessee operates a zinc processing facility that produces waste containing gallium and germanium. The company has partnered with research hubs to develop processes for extracting these metals from zinc waste.
Nyrstar announced plans to build a new facility in Clarksville capable of producing 30 tons of germanium and 40 tons of gallium yearly. However, the project’s current status is uncertain, with no construction timetable. The challenge for firms outside of China lies in making a business case for gallium and germanium production, as it requires significant upfront investment for relatively small revenue. The ability of bauxite or zinc miners to produce these metals depends on their primary market conditions. The fluctuating prices of aluminum, zinc, gallium, and germanium play a significant role in the operation of mines and smelters. According to Wang, if the prices of these metals are low, it may not be economically viable for mines or smelters to operate, even if there is a high demand for gallium or germanium in the market.
However, there has been a shift in the economic incentives for producing these metals in recent years. The geopolitical tensions have led to a “bifurcation” in the price of gallium, as highlighted by Tsianos. The price of gallium outside of China is now nearly double that within the nation’s borders, creating a favorable business case for production outside of China.
Tsianos emphasized that this structural change in the market was triggered by export control measures. The export restrictions imposed by certain countries have led to a rise in the price of gallium, making it more profitable for producers outside of China to enter the market.
Overall, the current market dynamics suggest that there is a growing demand for gallium and germanium, despite the challenges posed by fluctuating prices of other metals. The shift in economic incentives and geopolitical factors are driving changes in the production and pricing of these critical metals, creating new opportunities for producers outside of China to capitalize on the growing market demand. The sun was shining brightly in the sky, casting a warm glow over the bustling city streets below. People were out and about, going about their daily routines and enjoying the beautiful weather. It was a picture-perfect day, and everyone seemed to be in a good mood.
As I walked along the sidewalk, I couldn’t help but feel a sense of contentment wash over me. The sun’s rays felt wonderful on my skin, and the gentle breeze was refreshing. I had no particular destination in mind; I was simply enjoying the moment and taking in the sights and sounds of the city.
I passed by a street performer playing a lively tune on his guitar, and a crowd had gathered around him, clapping and swaying to the music. The energy was infectious, and I found myself smiling as I watched the scene unfold before me.
Further down the street, I came across a group of children playing in a nearby park. Their laughter and shouts filled the air, and it was impossible not to be swept up in their joy and excitement. I watched as they ran around, playing tag and climbing on the playground equipment, their faces lit up with pure happiness.
As I continued on my walk, I couldn’t help but think about how important it is to savor these simple moments of joy and connection. In a world that can often feel chaotic and overwhelming, it’s easy to get caught up in the hustle and bustle of everyday life and forget to appreciate the little things that bring us happiness.
Whether it’s a beautiful sunny day, a spontaneous encounter with a street performer, or the laughter of children at play, these moments remind us of the beauty and magic that surrounds us every day. They serve as a gentle reminder to slow down, take a deep breath, and savor the present moment.
As I made my way back home, I felt a renewed sense of gratitude and appreciation for the simple pleasures that life has to offer. The sun was beginning to set, casting a warm golden light over the city, and I couldn’t help but feel a sense of peace and contentment wash over me.
In that moment, I made a promise to myself to always take the time to appreciate the beauty and joy that surrounds me, to savor the simple moments that bring me happiness, and to never lose sight of the magic that exists in the world around me. And as I watched the sun dip below the horizon, I knew that I was exactly where I was meant to be.
