Except gallium and germanium are not household names. But these rare earth metals should be.
China controls the world processing and refining of rare earth metals
Gallium and germanium: an introduction
Gallium and germanium are essential for producing electric vehicles, wind turbines, solar panels, and high-tech defense weapons. Gallium is most common in semiconductors, transistors, and small electronic devices. It's also used to make LEDs. There is also military-grade Gallium Nitride: it can be found in advanced weapons technology produced by the US defense companies.
Germanium can be found in rectifiers, transistors, and weapons-sighting systems .
China produces 60 percent of the world’s germanium and 80 percent of gallium, according to the European industry association Critical Raw Materials Alliance (CRMA).
"Gallium and germanium are chess pieces in a geopolitical game of enormous proportions", according to Christopher Ecclestone, a mining strategist at the financial advisory firm Hallgarten & Company
China: starting August 1, 2023 certain gallium and germanium products will require an export license
It was only a matter of time until China decided to use its practical monopoly on processing and exporting rare earth metals.
... and TerraManta identified these risks on April 12, 2023 in What do F-35 Lightning II and iPhone 14 have in common?.
So what's next?
The United States Department of Defense holds strategic stockpiles for germanium but no reserves for gallium.
Companies that rely on the minerals for semiconductors and electric vehicles are racing to secure supplies as fears of shortages grow.
The full impact of China’s new export controls may not be fully understood until these export controls are fully implemented while Western governments and companies prepare a response as well as consider alternate sources. Nevertheless as it stands, the controls look likely to lead to higher prices for gallium and germanium, as well as longer delivery times.
Coal ... as a source for germanium?
Yes. While China dominates germanium supplies made from zinc production, germanium can also be sourced from coal.
Two of the main producers of coal are Russia and Ukraine, and the war has affected supplies to the West from both countries. In the years 2017-20, Russia was supplying 9% of the US germanium needs.
In response to the Chinese restrictions, Russia plans to increase germanium production for its domestic market. This may at least alleviate global demand, even if the West many not benefit from Russia's decision.
Germanium from coal is also at the mercy of the power industry, since certain coals rich in the element are burned as an energy source. In addition, germanium from coal will become more difficult as much of the world seeks to phase out coal power, which again could tighten supplies.
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