Tag Archives: rare earth industry China

We Should Have Done it 30 Years Ago: Gallium

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Gallium is processed with nitrogen and arsenic to make substrates for high-performance semiconductors. In chips, gallium can handle high levels of electricity and is more heat- and moisture-resistant than silicon. Beyond cellphones and laptops, it is also used in satellites to protect components from radiation in space.

China, which accounts for most of the world’s production of critical minerals, introduced export controls on gallium in 2023. In 2024, it banned gallium exports to the U.S. outright. China later suspended the ban, but could reinstate it later in 2026….Benchmark prices for gallium outside of China have roughly tripled over the past two years. January’s 2026 average price was a record high at nearly $1,572 a kilogram,. 

One project the Trump administration has targeted is in Wagerup, Western Australia. Alcoa has operated a refinery there since the 1980s that processes bauxite to make alumina. The bauxite also contains trace amounts of gallium, so Alcoa intends to build a plant to extract it.  The U.S. government plans to provide funding for the effort, along with Australia and Japan. In return, Alcoa said, the governments will receive a share of the metal from the plant. The plant is expected to eventually account for about 100 metric tons of gallium, or 10% of global gallium demand, according to Alcoa. Worldwide, 760 tons of gallium were produced in 2024…“There’s a lot of work to be done on how we do collaborate and work together to develop this industry,” Madeleine King, Australia’s mining minister, said Feb. 4, 2026.

“We should have done it 20 or 30 years ago.”

Excerpt from Bob Tita, The Defense Department Is Infatuated With This Drippy Silver Metal, WSJ, Feb. 9, 2025

While United States Hibernated, China Salivated

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When China tightened restrictions on rare-earth exports in October 2025, stunning the United States, it was the latest reminder of Beijing’s control over an industry vital to the world economy. China’s dominance was decades in the making. Since the 1990s, China has used aggressive tactics to build up and maintain its lock over rare-earth minerals, which are essential to making magnets needed for cars, wind turbines, jet fighters and other products. Beijing provided financial support to the country’s leading companies, encouraged them to snap up rare-earth assets abroad, and passed laws preventing foreign companies from buying rare-earth mines in China. It eventually consolidated its domestic industry from hundreds of businesses into a few giant players, giving it further leverage over prices…

In 1995, Chinese state-linked companies received U.S. government approval to buy the rare-earth materials and magnet business started by General Motors, called Magnequench. In the following years, the Chinese ownership shut down all its rare-earth plants in the U.S. and shipped the equipment to China. Top American engineers were offered opportunities to go to China and set up new plants there.  “There were some colleagues that were dead set against it, saying they would never help China learn our technology,” said one magnet expert who ultimately agreed to go to China. “When I arrived, I could not believe what I was seeing. The number of new factories being built, and the rate at which they were being built, was mind-blowing,” he said….  By the mid-2000s, the U.S. rare-earth industry had been all but wiped out. Mountain Pass, America’s major rare-earth mine, had been shut down, as had virtually all American facilities that processed rare earths and turned them into magnets. China produced around 97% of the world’s rare earths, giving it what was effectively a global monopoly…

By 2021, the U.S. government was growing more worried about China’s ability to weaponize rare earths, causing prices to jump. Washington began offering large-scale funding for new rare-earth plants, including a refinery in Texas to be built by Lynas, an Australian rare-earth company. But in 2021, the Association of China Rare Earth Industry issued a warning: to China’s leadership If Beijing wanted to maintain “China’s absolute dominant position,” the country needed to relax state production quotas. Beijing responded in 2022 by pushing up output by 25%, the most in years, with another large increase the following year. Prices tanked, hitting the bottom lines of Western producers and leading some to unload assets…Beijing also introduced new measures preventing the transfer of its rare-earth processing technology abroad.

Excerpt from Jon Emont, How China Took Over the World’s Rare-Earths Industry, WSJ. Oct. 19, 2025