China Bans Key Mineral Exports to US As Tech Trade War Escalates

China recently imposed a ban on exporting gallium and germanium to the US, citing their dual military and civilian applications.

These trace minerals are essential for various technologies, including computer chips, night vision goggles, electric vehicles, and solar cells.

China dominates the global supply, providing 98% of primary gallium and 91% of primary germanium.

Primary sources of these minerals are limited, with gallium extracted as a byproduct of bauxite refining and germanium sourced from zinc refineries and coal fly ash.

The ban follows the US's ongoing restrictions on semiconductor exports to China, aimed at preventing the use of advanced chips in military applications such as AI-driven warfare systems and hypersonic missiles.

In 2023, a US Department of Defense report revealed a strategic stockpile of germanium but no reserves of gallium. The US Geological Survey estimated that a complete ban could lead to a $3.4 billion GDP loss.

Gallium and germanium are also critical in everyday technologies, including LEDs, optical fibers, and electronic devices like smartphones and laptops.

To mitigate the impact, the US may explore domestic mining and partnerships with allies. Historically, the Apex mine in Utah produced both minerals, but it has since closed.

Investments in refining facilities in friendly nations, such as Canada’s Teck Resources, and recycling from secondary sources are potential solutions. However, recycling remains complex and costly, with limited current recovery yields.

China’s move represents a major supply chain disruption, underscoring the need for technological advances in recovery processes to reduce reliance on Chinese exports.

Efforts to secure alternative sources and develop cost-effective recovery methods may determine the future resilience of US industries dependent on these critical materials.