Metals Crucial to Clean Energy Are Getting Caught Up in the US–China Trade War

In the summer of 2023, Vasileios Tsianos, the vice president of corporate development at Neo Performance Materials, started getting calls from government officials on both sides of the Atlantic. Within the world of industrial material manufacturing, Neo is best known for making rare earth magnets, used in everything from home appliances to electric vehicles. But these calls weren’t about rare earths. They were about something considerably rarer: the metal gallium.

Neo recycles a few dozen tons of high-purity gallium a year, mostly from semiconductor chip manufacturing scrap, at a factory in Ontario, Canada. In North America, it’s the only industrial-scale producer of the metal, which is used in not only chips, but also clean energy technologies and military equipment.

China, the world’s leading producer by far, had just announced new export controls on gallium, apparently in response to reports that the United States government was considering restrictions on the sale of advanced semiconductor chips to China.

All of a sudden, people wanted to talk to Neo. “We’ve spoken to almost everyone” interested in producing gallium outside of China, Tsianos told Grist.

Since Tsianos started receiving those calls, tensions over the 31st element on the periodic table—as well as the 32nd, germanium, also used in a bevy of advanced technologies—have escalated. In December, China outright banned exports of both metals to the United States following the Biden administration’s decision to further restrict US chip exports.

Now, several companies operating in the US and Canada are considering expanding production of the rare metals to help meet US demand. While Canadian critical minerals producers may get swept up in a new geopolitical tit-for-tat should Trump go through with his threat to impose tariffs, US metal producers could see support from the new administration, which called for prioritizing federal funding for critical minerals projects in a Day 1 executive order. Beyond the US and Canada, industry observers say China’s export ban is fueling global interest in making critical mineral supply chains more diverse so that no single country has a chokehold over materials vital for a high-tech, clean energy future.

“This latest round of export bans are putting a lot of wind in the sails of critical minerals supply chain efforts, not just in the US but globally,” Seaver Wang of the Breakthrough Institute, a research center focused on technological solutions to environmental problems, told Grist.

Gallium and germanium aren’t exactly household names. But they are found in products that are indispensable to modern life—and a fossil fuel-free society. With its impressive electrical properties, gallium is used in semiconductor chips that make their way into everything from cell phones to power converters in electric vehicles to LED lighting displays. The metal is also used in the manufacturing of rare earth magnets for electric vehicles and wind turbines, in thin film solar cells, and sometimes, in commercially popular silicon solar photovoltaic cells, where it can help increase performance and extend lifespan.

Gallium is sometimes used in silicon solar photovoltaic cells, where it can help increase performance and extend lifespan.

Germanium, meanwhile, is used to refract light inside fiber optic cables. In addition to helping form the backbone of the internet, the metal’s exceptional light-scattering properties make it useful for infrared lenses, semiconductor chips, and high-efficiency solar cells used by satellites.

There aren’t many substitutes for these two elements.  Some silicon-based semiconductors lack gallium, and specialized glasses can be substituted for germanium in certain infrared technologies. Solar cells are often doped with boron instead of gallium. But these two metals have specific properties that often make them the ideal material. When it comes to clean energy, Tsianos told Grist, there are no substitutes “within the material performance and cost trade-off spectrum” offered by gallium.

Because a little bit goes a long way, the market for both metals is small—and it’s dominated by China. In 2022, the world produced about 640 tons of low-purity gallium and a little over 200 tons of germanium, according to the US Geological Survey. In recent years, China has accounted for virtually all of the world’s low-purity gallium output and more than half of refined germanium.

That’s partly due to the fact that both metals are byproducts of other industries. Gallium is typically extracted from bauxite ores as they are being processed to make aluminum oxide, while zinc miners sometimes squeeze germanium out of waste produced during refining. China is a leading producer of these common metals, too—and its government has made co-extracting gallium and germanium a priority, according to Wang. “It is very strategic,” he said.

China’s dominance of the two metals’ supply chains gives it a considerable cudgel in its ongoing trade war with the US, which produces no virgin gallium and only a small amount of germanium while consuming approximately 50 tons a year of the two metals combined. A US Geological Survey study published in November found that if China implemented a total moratorium on exports of both metals, it could cost the US economy billions. Weeks after that study was published, China announced its ban.

The ban is so new that it’s not yet clear how US companies, or the federal government, are responding. But America’s high-tech manufacturing sector isn’t without fallback options. North of the border, Neo’s facility in Ontario stands ready to double its production of gallium, according to Tsianos. “We have the capacity,” he told Grist. “We’re waiting for more feedstock.”

Currently, Neo’s only source of gallium is the semiconductor industry. Chip makers in Europe, North America, and Asia send the company their scrap, which it processes to recover high-purity gallium that feeds back into semiconductor manufacturing. But Tsianos says Neo is piloting its technology with bauxite miners around the world to create new sources of virgin gallium. The idea, he says, is that bauxite miners would do some initial processing on-site, then send low-purity gallium to Neo for further refining in Canada. Tsianos declined to name specific bauxite firms Neo is partnering with, but said the company is “making progress” toward making new resources available.

Meanwhile, in British Columbia, mining giant Teck Resources is already a leading producer of germanium outside of China. The firm’s Trail Operations refinery complex receives zinc ore from the Red Dog mine in northwest Alaska and turns it into various products, including around 20 tons of refined germanium a year, according to a US Geological Survey estimate. (Teck doesn’t disclose production volumes.)

That germanium is sold primarily to customers in the US, Teck spokesperson Dale Steeves told Grist. In wake of the export ban, Steeves said that the firm is now “examining options and market support for increasing production capacity of germanium.”

Kwasi Ampofo, the head of metals and mining at the clean energy research firm BloombergNEF, told Grist that in the near term, he would expect the US to “try to establish new supply chain relationships” with countries that already have significant production, like Canada, to secure the gallium and germanium it needs. That may be true whether or not Trump’s proposed tariffs on Canadian imports become reality. Tsianos was bullish in spite of the tariff threat, noting in an email that Neo “remains the only industrial-scale and commercially operating Gallium facility in North America.”

“[W]e are committed to continue serving our European, American, and Japanese customers in the semiconductor and renewable energy industries,’ Tsianos added.

Steeves told Grist that a trade war between the US and Canada would be “a negative for the economy of both nations, disrupting the flow of essential critical minerals and increasing costs and inefficiencies on both sides of the border.” Teck, he said,  “will continue to actively manage our sales arrangements to minimize the impact to Trail Operations.”