Highlights

• China dominates 98% of gallium production and controls refining of both gallium and germanium—critical metals powering radar, semiconductors, and defense systems—while the U.S. faces a multi-year vulnerability window with no meaningful domestic production until 2029–2030.
• Metallium's recycling deal offers strategic optionality but no guaranteed volumes or supply security, and recycling alone cannot meet industrial-scale demand as end-of-life scrap remains thin and extraction is chemically complex.
• A two-tier pricing system has emerged with gallium at ~$300/kg in China versus ~$2,500/kg outside China, forcing Western buyers into gray-market routing through third countries—creating inefficiency, opacity, and strategic risk for defense-grade supply chains.

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Gallium and germanium are not bulk commodities—they are precision choke points considered rare critical metals. Metallium’s (opens in a new tab) recycling deal reported on today by Rare Earth Exchanges™ represents some progress, but in a tightening global supply crisis dominated by China, it does little—yet—to secure meaningful supply for the West.

The Hook: When Grams Decide Geopolitics

Wars are no longer fought only with steel and fuel. They are fought with grams of gallium in radar systems, and of germanium in night vision.

And right now, those grams are controlled elsewhere.

The Deal: A Pathway, Not a Pipeline

Metallium’s 10-year offtake agreement for recycled gallium and germanium is strategically aligned—but structurally limited. No minimum volumes. No guaranteed revenue. Flexible pricing. Exit clauses. This is not supply security. It is optionality.

And in a market defined by scarcity, optionality does not move the needle—volume does.

The Metals: Tiny Inputs, Massive Leverage

Gallium and germanium are “rare dispersed” metals—byproducts of aluminum, zinc, and coal processing. They are not mined directly at scale.

• Gallium powers GaN and GaAs semiconductors—critical for radar, electronic warfare, power electronics, and 5G infrastructure
• Germanium underpins fiber optics, infrared optics, and thermal imaging—core to surveillance and targeting systems

China dominates refining. Not mining—refining. That distinction is everything. As REEx has previously reported, control of processing—not geology—is the real leverage point.

Recycling: Necessary—but Not Sufficient

Recycling is part of the story—but not the solution.

Why? Because the scrap isn’t there.

Gallium nitride applications have only scaled meaningfully in the last decade. End-of-life recycling volumes remain thin. Most recoverable material comes from manufacturing scrap—not discarded products.

And the chemistry is complex. These metals are dispersed in trace quantities, making extraction difficult and costly.

Recycling helps—but it cannot yet supply industrial-scale demand.

The Supply Illusion: Projects vs. Time

Project	Metals	Timeline Reality
Alumina-to-gallium (Canada)	Gallium	Pilot stage, mid-decade scale
U.S. smelter rebuild (Tennessee) (Korea Zinc)	Ga + Ge	Late-decade production
African tailings → European refining	Germanium	Early-stage flows
U.S. specialty materials expansion	Germanium	Incremental capacity

The problem is not effort. It is time.

According to a Rare Earth Exchanges assessment of supply gap projections, meaningful U.S. gallium production may not arrive until 2029–2030, a multi-year vulnerability window.

The Real Market: Controlled, Constrained, and Distorted

China has effectively weaponized supply.

• Export controls began in 2023
• Licensing language softened in late 2025—but approvals remain opaque to nonexistent
• Direct flows to the U.S. appear severely constrained

So how does material move?

Through the gray market.

Third-country routing—via Southeast Asia and intermediaries—has become the workaround. It is inefficient, opaque, and risky for defense-grade supply chains.

Prices reflect the strain:

• ~$300/kg in China
• Up to ~$2,500/kg ex-China

That is not a market. That is a two-tier system under stress.

The Crisis: A Narrowing Window

The implication is stark: The U.S. has no meaningful domestic production today, and limited near-term alternatives.

China controls ~98% of gallium production, while U.S. demand continues to rise.  And Rare Earth Exchanges suggests if constraints persist, risks escalate:

• Delays in radar and defense systems
• Semiconductor bottlenecks
• Strategic vulnerability in AI and communications

Factor in all-out war in the Middle East, and trouble is more than just around the corner.

The Way Out: Not One Solution—A System

There is no single fix. Only a coordinated response:

• Accelerate midstream refining capacity—emergency powers where possible
• Lock in allied offtake agreements now, not later
• Fund inventory and stockpiles to bridge the gap
• Scale recycling where viable—but realistically
• Build industrial policy with urgency, not aspiration. And here we mean industrial policy far more comprehensive than what Trump 2.0 has done thus far

Bottom Line: Progress Meets Reality

Metallium’s deal is directionally right.

But in a supply war measured in kilograms, it is not yet decisive.

The West is not short on ideas. It is short on time---midnight is close.