On 20 October, the US and Australian governments announced that they had signed a critical minerals framework, which includes investment by the Department of War (DoW) in the construction of a 100tpy advanced gallium refinery.

Two months after Alcoa and the Japan Australia Gallium Associates (JAGA), a joint venture (JV) between Sojitz and the Japan Organization for Metals and Energy Security (JOGMEC), partnered with Alcoa on the feasibility of gallium production, the US and Australian governments announced their intention to construct a 100tpy gallium production facility at Alcoa’s Wagerup alumina refinery in Western Australia.

Following the completion of feasibility assessments, Alcoa expects a joint US, Australia, and Alcoa special purpose vehicle (SPV) to enter into the JV agreement with JAGA to construct the gallium production line. Under the terms of the non-binding agreement, the US and Australian governments and Alcoa will provide capital to the SPV, receiving gallium in return proportionate to their interests.

However, the terms and volumes of the agreement are in the early stages, and parties are targeting 2026 for the final investment decision and production.

Following China’s announcement of gallium export restrictions in 2023, six ex-China players , including Alcoa, have unveiled plans to develop new gallium production lines. Despite these efforts, primary supply originating outside China remains scarce, estimated at just 1% of current global output, or roughly 10tpy Ga, from Russia, South Korea, and Japan combined.

This supply tightness has led to price volatility in international markets, with premiums reaching up to 150% above EXW China prices.

Presently, ex-China primary production capacity stands at 115.0tpy Ga, increasing to 130.5tpy Ga with Korea Zinc’s announcement on 19 October. Alcoa’s entry is expected to further increase total capacity to 230.5tpy Ga, representing roughly 13% of global operational primary gallium capacity.

According to Project Blue’s estimates, ex-China gallium demand reached 300tpy Ga in 2024. Although new Western production capacities, including announced projects, fall short of meeting current Western demand, which accounts for 83% of total consumption (including recycled material), these developments are expected to significantly reduce reliance on Chinese gallium sources.