US funds Alcoa gallium plant in Australia to cut China reliance

The US Department of War said it will provide $174 million in financing to Alcoa Corp. to build a gallium plant at its alumina refinery in Western Australia, as Washington seeks to reduce its reliance on China for critical minerals.

Gallium is used in high-performance semiconductors that are critical to defense technologies including advanced radar and missile guidance. China accounts for about 98% of global production, leaving Western nations heavily dependent on it for supplies, and in 2023 introduced export controls before banning all direct flows to the US the following year. 

Alcoa expects to produce about 100 tons a year of gallium metal from the plant at its Wagerup alumina refinery. Construction began last month. 

“This landmark agreement with our key allies, Australia and Japan, will secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come,” Michael Cadenazzi, assistant secretary of war for industrial base policy, said in a statement Tuesday.

The investment is the latest US effort to diversify supply chains for minerals vital to its defense and technology industries. Washington has increasingly turned to allies including Australia to secure alternative sources as China dominates the production and processing of many critical minerals.

Alcoa agreed to develop the plant in partnership with Japan’s Sojitz Corp. and the Japan Organization for Metals and Energy Security.

(By Paul-Alain Hunt)