- China has blocked the sale of gallium, germanium, antimony, and super-hard minerals to the United States in response to the Biden administration’s efforts to block sales of advanced chips to China.
- China is the world’s largest source of these critical minerals used in commerce and national defense applications.
- Much of the U.S. shortfall is not due to a scarcity of such minerals, but rather, government regulations that make it increasingly difficult to mine them.
This is another example of an unhealthy codependent relationship in which walking away is hard, if not downright, difficult.
In this case, it is the United States that is grappling with the sudden announcement that China would no long export to this country vital elements that include gallium, germanium, antimony and other super hard materials.
They are dual use products. Several of them are used in the manufacture of advanced superconductors and in military applications — such as armored piercing rounds and military explosives.
While Utah boasts the first mine in the world to harvest gallium and germanium, the Apex Mine in Washington County operated intermittently from 1884 to 1962, reopened and is now idled.
The Utah Geological Survey says none of these banned materials are mined in Utah. In fact, China remains the largest source of these vital elements. China currently provides 54% of the U.S.’s germanium needs, a key component in infrared technology and fiber optics. Gallium, used in semiconductors, has not been mined in the U.S. since 1987. The U.S. Geological Survey said it is believed that the vast majority of gallium is used in smartphones and other computer devices, while more than half the germanium is used in infrared optics and fiber optics.
Why the ban?
The Institute for Energy Research says it is simple.
The Biden-Harris administration expanded its curbs on technology to China by prohibiting the sale of certain types of chips and machinery and adding 140 Chinese companies to a restricted trade list. According to Biden-Harris administration officials, the limits were a routine action to update existing curbs and close loopholes that some businesses had used to circumvent restrictions.
The institute says it was the third such action against China, including an attempt to prevent it from catching up to the United States in developing advanced chips for military equipment and artificial intelligence.
But it is a tough relationship to put controls on.
“The Chinese government controls the supply chains of the critical minerals and rare-earth elements through subsidies, slave labor, and purchases of ore in Africa and Latin America. By making it harder to mine for these minerals in the United States and requiring the use of “green” technologies, the Biden-Harris administration is helping China expand its market power,” the institute said.
The U.S. imports gallium from Japan (26%), China (21%), and Germany (19%), along with other smaller suppliers.
The institute says although the U.S. has domestic deposits of these minerals, they have not been mined in large quantities, though some projects are now exploring ways to extract them.
As an example, researchers are working to extract valuable elements from an old coal mine in West Virginia and a lignite mine in North Dakota. Additionally, Perpetua Resources is developing an antimony mine in Idaho with support from the U.S. government, which awarded the company a $510,500 grant from the Department of Defense. At present, China, Russia, and Tajikistan control 90% of the global antimony supply.
The fallout
Markus Roas, a metals business manager at Indium Corporation, said U.S. only had a week’s worth of germanium and gallium remaining, and that was in September before the total ban was implemented. Until this point, the exports of gallium and germanium were a fraction of what they once were.
The Sourceability article said that doesn’t even address the cost. Since the partial ban on antimony in August, the price of antimony trioxide has more than doubled to over $39,000 per metric ton.
“It’s a sign of the times. The military uses of Sb (antimony) are now the tail that wags the dog. Everyone needs it for armaments, so it is better to hang onto it than sell it. This will put a real squeeze on the U.S. and European militaries,” Christopher Ecclestone, a principal and mining strategist at Hallgarten & Company in London, told CNN shortly after Beijing announced the curbs on antimony exports.
“It is no secret that antimony prices worldwide continue to hit fresh record highs after a prolonged period of supply constraints,” said United States Antimony Chairman Gary Evans. “The upswing in prices has gathered pace which is underpinned by depleting domestic antimony resources in China as well as other parts of the world.”
The ban will challenge many semiconductor manufacturers in the coming months. After two years of flat consumer demand, exacerbated by the global semiconductor shortage, many companies are predicted to struggle to stay afloat. Access to critical raw materials like gallium, germanium, and antimony is becoming increasingly important due to the heightened demand for electronics due to AI.
Money and the military
Like any codependent relationship starting to spiral downward, the fallout is dramatic.
The Diplomat reports that the resulting supply disruptions from China’s new export ban could have a multibillion-dollar impact on the U.S. economy. For example, the U.S. Geological Survey recently calculated that if China blocked all exports of gallium alone, U.S. gross domestic product could decline by up to $8.2 billion.
Since China’s export ban takes immediate effect, the U.S. defense industrial base could experience short-term mineral shortages and higher prices. This should not be taken lightly: mineral shortages can impede defense manufacturing and undermine the strength of the military, just as the United States experienced during World War II.
The Center for Strategic and International Studies stressed a key victim in this trade war is the U.S. military.
“Gallium, germanium and antimony are vital inputs for defense technologies. China is making significant investments in munitions and acquiring high-end weapons systems and equipment at a rate that is five to six times faster than that of the United States. In terms of strengthening military preparedness, China is operating in a wartime posture while the United States is operating in a peacetime posture,” it said. “Even prior to the new restrictions, the U.S. defense industrial base lacked the capacity and surge capabilities to meet defense technology production needs. Bans on vital mineral inputs will only further allow China to outpace the United States in building these capabilities.”
