The US Government is providing US$174 million ($243 million) to support the construction of a new gallium production facility at an Alcoa (NYSE:AA) alumina refinery in Western Australia.
The Department of War (DoW) announced the proposed funding for the plant in Wagerup as part of its ongoing efforts to diversify supply chains for minerals considered vital to US defence and technology industries.
Gallium is used in high-performance semiconductors that are critical to defence technologies, including advanced radar and missile guidance systems.
China currently accounts for about 98% of global gallium production, leaving Western countries heavily dependent on the nation for supply.
Beijing introduced export controls on gallium in 2023 before banning direct shipments to the US the following year, increasing pressure on Washington and its allies to develop alternative sources.
Alcoa breaks ground
The funding announcement comes days after Alcoa broke ground on construction of the new gallium facility at its Wagerup alumina refinery.
Once operational, the plant is expected to produce around 100 tonnes of gallium metal annually.
Alcoa’s Wagerup refinery began operations in 1984 and is one of the world’s most technologically advanced alumina processing sites, producing around 2.9 million tonnes of alumina annually.
The US funding will be provided as an equity investment through the Industrial Base Analysis and Sustainment (IBAS) program.
The project forms part of a multinational partnership involving Export Finance Australia, the Government of Japan, and Sojitz (TYO:2768).
“This landmark agreement with our key allies, Australia and Japan, will secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come,” US Assistant Secretary of War for Industrial Base Policy Michael Cadenazzi said.
Write to Jackson Chen at Mining.com.au
Image: Alcoa
