PEAK ASSET: MORNING WRAP 13 April: The S&P/ASX 200 points to a 0.8 per cent rise at the open on Monday | Oil soars 8pc | Gallium supply faces fresh threats that could serve up a win for Australia |

Gallium supply faces fresh threats that could serve up a win for Australia

• Hefty taxpayer subsidies favour gallium as a by-product, which is not optimal for recoveries
• Western Australia touted by emerging producers as a low-risk way to kick the alumina route

Gallium, essential for semiconductors and defence, is the latest national security metal to have its supply chain threatened as the Middle East comes under fire as a refinery zone.

Trace amounts of gallium are found in aluminium feedstock bauxite, already linking Australia to the United States and Japan across complex supply chains and now on new national security grounds.

The US Department of Defense has no supply, needing access to in-ground resources as well as non-Chinese IP for processing, posing a problem for advanced electronics and other essential industries of any world power.

Fighting off China’s chokehold on supply, US aerospace and defence company RTX last year partnered with Emirates Global Aluminium to work towards producing high-purity gallium from bauxite residue at the Al Taweelah refinery supposedly to create a new and less coercive supply chain.

Also in the firing line is Aluminium Bahrain, or Alba, one of the world’s largest aluminium smelters outside China with annual production capacity of more than 1.6 million tonnes and gallium as a by-product.

For scale, even when Australia’s four primary aluminium smelters – Tomago in NSW, Queensland’s Boyne Island, Victoria’s Portland and Bell Bay in Tasmania – were able to pay their power bills, they produced roughly that tonnage of aluminium annually – combined

It’s the law

Securing Australia’s critical minerals strategic reserve – and future fuel supply – new laws passed in April established a long-promised mechanism.

This allows the government to meet demand, support offtake and stockpile the inputs that are vital to national security and Australia’s ambition to become a more sophisticated quarry for its allies and friends.

“It’s not just EVs, iPhones and laptops, but also radar systems, night vision systems, submarines and advanced weapons,” Resources Minister Madeleine King told parliament, recently updating the nation about the initial push to focus on gallium, antimony and rare earths.

“All needed for national resilience and our national security,” King said.

With rocks aplenty but no tech, a new critical metals research centre with a $53 million slush fund will link industry and funding projects at University of WA, Curtin University, Macquarie University and Swinburne University to develop refining methods.

Vulnerable on multiple fronts

Embedded in satellite communications, sensors, radar and missile defence systems as well as being required for LEDs and renewable energy systems, gallium is niche … and critical. The metal’s unique properties meet the need of technologies requiring extreme precision and reliability.

Yet China controls more than 99% of global gallium production, according to US Geological Survey data, creating a strategic vulnerability for the US Department of War when American capabilities increasingly depend on semiconductor-based technologies.

“You’re not just talking about the in-ground resource, you’re talking about the processing capacity,” Mount Ridley Mines (ASX:MRD) chief executive Allister Caird told Stockhead.

“Whilst there’s money allocated from Australian and US jurisdictions, largely for facility design and production, in terms of actually developing IP around maximising gallium recovery as a by-product, you might not be seeing optimal recoveries,” he said.

Located near Esperance, the clay-hosted deposit is among the world’s largest public reported JORC resources, positioning MRD as a future supplier to the expanding gallium-nitride semiconductor market, bringing 838.7 million tonnes grading 29.3ppm for 24,584t of contained gallium.

Recent wins in the lab have also fired up the rare earths case. Recovering rare earths, scandium and gallium from a single material stream could be a game-changer for project economics and lead the way for peers.

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Source: Stockhead