Three years after China implemented export restrictions on gallium and germanium, critical metals essential for semiconductor manufacturing, clean energy infrastructure and defence applications, Western companies continue to grapple with elevated prices and supply constraints. The export curbs introduced in 2023 have forced manufacturers across multiple sectors to fundamentally reassess their supply chain strategies, driving adoption of alternative materials, increased stockpiling and investment in domestic production capacity. Currently, prices for these niche metals stand at nine to ten times their 2023 levels, underscoring the market pressure created by China's export controls.
According to consultancy Project Blue, China in 2025 still accounted for 98.9 percent of primary gallium supply and 68.6 percent of germanium supply globally, revealing minimal progress in reducing the region's market dominance despite Western efforts to diversify sourcing. The supply challenges have prompted companies to pursue multiple strategies simultaneously. Manufacturers are stockpiling materials ahead of finalised designs to ensure availability, exploring substitution with alternative materials and working to boost recycling of existing stock.
Infrared optics manufacturers, who produce equipment for defence and thermal imaging systems, have been particularly affected by tight supply conditions, according to Cristina Belda, senior analyst at Argus. She noted that export controls have acted as a catalyst for procurement diversification, with companies increasingly turning to recycling, alternative suppliers and emerging non-China projects. Demand for these metals continues to rise, driven by expansion in artificial intelligence applications, growing fibreoptic network infrastructure and increasing use of infrared imaging technologies.
S&P Global preliminary estimates indicate gallium demand is expected to rise by approximately 12 percent annually through 2030 from approximately 1,000 metric tons in 2025. Global germanium demand is projected to increase by 3.3 percent annually over the same period from an estimated 343 tons in 2025. Metals substitution presents significant technical obstacles.
Germanium, primarily a byproduct of alumina and zinc processing, has no direct one-to-one substitute according to industry specialists. Jessica DeGroote Nelson, senior vice president of precision optics at US-based Edmund Optics, emphasized that while substitution is not impossible, it requires costly redesigns and extended development timelines. Some applications have seen gallium arsenide replaced by indium phosphide in semiconductor manufacturing, while zinc selenide, zinc sulphide, silicon and chalcogenide glass are gaining traction as germanium alternatives in infrared applications.
All substitution paths require technological adjustments that consume considerable time and resources. Recycling initiatives are emerging as part of the strategic response. US-based Lattice Materials, which uses germanium to produce crystals for military displays, is pursuing recovery routes.
Belgium's Umicore has partnered with STL, a unit of Gécamines, to boost germanium recovery from mining waste in the Democratic Republic of Congo. Western production projects are now advancing, with government support accelerating development timelines. In April, Australia and the United States pledged over 3.5 billion dollars to support critical minerals projects, including gallium and germanium facilities, nearly doubling an initial commitment made the previous year.
Greece's METLEN has begun pilot-scale production and targets 50 tons of gallium annually by 2028, though the company reports demand from potential customers already exceeds that target several times over. S&P Global projections reveal the scale of remaining supply gaps. Ex-China gallium supply capacity is expected to reach 20 tons by the end of 2026, leaving a supply deficit of approximately 678 tons against projected demand.
Non-Chinese germanium metal production is seen at 31 tons, falling short of demand by 177 tons. By 2030, eight announced projects including Wagerup in Australia and Clarksville in the United States could boost ex-China gallium supply to approximately 386 tons from roughly 5 tons currently. However, this expansion would still leave ex-China demand looking to China for 65 percent of required supply.
For germanium, new projects in Canada, South Korea and the United States are expected to increase ex-China refining capacity to 126 tons by 2030. Even with five ex-China refineries potentially operating, capacity would cover only approximately 48 percent of projected ex-China demand according to S&P Global estimates. Several announced gallium projects remain in development phases.
METLEN in Greece, Alcoa and Sojitz in Australia, Rio Tinto and Indium Corporation in Canada, and Nalco in India continue work on production facilities that have not yet reached full commercial operation. Korea Zinc is developing capacity domestically and at a planned Tennessee refinery, while US-based ReElement Technologies is developing a refining complex in Indiana. Titan Mining expects to commence germanium production in New York state by year-end at 2.5 to 3 tons, representing approximately 7 to 10 percent of US demand.
Canada's Teck Resources struck a deal with the Canadian government in July to support production expansion at its Trail, British Columbia facility. Industry experts emphasize the challenging economics facing new Western producers. Jack Bedder, founder of consultancy Project Blue, stated that while credible projects with government support offer opportunities for greater diversification, economies of scale continue to favour China with its enormous production capacity and lower production costs.
He noted that while material reduction in China dependence appears achievable within five years, complete elimination of reliance on Chinese supply remains unrealistic given current capacity trajectories. Piyush Goel, consultant at London-based CRU consultancy, suggested that government support mechanisms such as price floors will likely be necessary to bring new supply to market and ensure long-term commercial viability of Western production projects. Supply participants stress that price relief remains distant.
Travis Wood, president of Lattice Materials, told Reuters that available data points suggest prices will either remain at current elevated levels or continue their upward trajectory in the near-term as demand continues to expand faster than supply additions can address.
Source: mining.com