China has a firm grip on the world’s graphite production. In 2021, it produced over 820,000 tons of this mineral, while Brazil, the second-ranking country, produced only about 68,000 tons. China monopolizes 90% of graphite, a dominant position it has utilized to stop supplying the U.S. and its allies.
This move by China serves two purposes. Firstly, it’s a response to U.S. sanctions on semiconductors. Secondly, it aims to strengthen China’s position in the electric car market. In addition to graphite, China also controls the production of two other crucial minerals for the semiconductor, electric car, and telecommunications industries: germanium and gallium.
The U.S. Wants to Extract Its Own Gallium
The Chinese government implemented strict controls on the export of germanium and gallium in August of last year and intensified control over graphite exports on December 1, 2023. The Xi Jinping administration maintains that this strategy is a crucial component of its national security policy, a stance that closely mirrors the arguments put forth by the U.S. when imposing new sanctions on Chinese companies.
The U.S. was able to source its own gallium reserves until it abandoned the production in 1987.
Refined gallium is a crucial metal not only for semiconductor production, semiconductors but also for telecommunications devices and advanced weaponry. It’s evident that the U.S. and other major world powers can’t afford to be without it. Currently, the supply of gallium, germanium, and graphite is in China’s control, placing both the U.S. and Europe at the country's mercy.
The interesting thing is that the U.S. used to have gallium. It was actually able to extract its own reserves of refined gallium until it stopped producing it in 1987. Currently, China controls 98% of the world’s refined gallium production, and the U.S. has to import 100% of this metal. Due to the instability of the supply of gallium and other chemical elements resulting from the tension between China and Western countries, the U.S. has been searching for new gallium reserves. And it's found them.
Last March, the Critical Materials Corporation announced the discovery of a strategically significant high-purity gallium deposit in the Bitterroot National Forest, which spans Idaho and Montana. The company claims to have developed technology for environmentally-friendly gallium extraction and processing, but environmentalists are cautious and are now seen as the main obstacle to gallium extraction.
This conflict will likely delay the extraction of this deposit, but given gallium’s strategic importance, it’s likely that gallium from the Bitterroot National Forest will eventually help the U.S. reduce its dependence on China’s production.
More information: SCMP
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