China Weaponizes Gallium Flows To West As US Miner Reveals New Discovery In Montana

China dominates the global production of the rare earth metal gallium, a critical component in semiconductor manufacturing and advanced weapon systems used by the United States. 

Since China restricted gallium and germanium flows to the US last summer - seen as a tit-for-tat response to the worsening US-China trade war - prices of the metal have doubled (around $575 a kilogram delivered to Rotterdam), according to Bloomberg, citing new data from commodity firm Fastmarkets. 

European government data shows China refines 94% of the world's gallium, making the West entirely reliant on Chinese supply. Higher prices mean higher production costs for semiconductors, from radar systems to smartphone screens. 

China's throttling of rare earth minerals supplies is a national security threat and could easily be weaponized against US defense and aerospace companies. 

Here's a breakdown of rare earth metals used in US defense weapons. 

More importantly, Beijing's motive to limit gallium supplies could revolve around the US supplying Taiwan weapons, like Patriot missile launchers whose targeting systems heavily rely on semiconductors made with gallium. 

With China only shipping out 2,760 kilograms of gallium in the first two months of 2024, down from 8,865 kilograms a year earlier, the US must secure new supplies. 

There is good news, or at least the start of it. 

US Critical Materials announced in recent weeks that it discovered a "strategically significant" deposit of high-grade gallium on its 6,700 acres of claims in southwest Montana.

Website Mining.com said the Pentagon is preparing to dish out first-time contracts to US or Canadian companies to recover gallium in North America. 

In December 2023, US Critical Materials signed an agreement with Idaho National Laboratories to develop high-tech rare earth processing methods. 

The US must build out its domestic supply chain of mining and refining rare earth minerals to break the addiction from China. This move is crucial to prevent China from potentially disrupting supplies to US defense manufacturers and jeopardizing national security.