The United States is currently facing the unexpected news that China has decided to halt its export of crucial elements, such as gallium, germanium, antimony, and other super hard materials.
These products have dual uses. Some of them find application in the production of advanced superconductors, while others are utilized in military contexts, such as the creation of armored piercing rounds and military explosives.
Utah takes pride in being home to the world’s first mine that successfully extracts gallium and germanium. The Apex Mine, located in Washington County, had a rich history of operation from 1884 to 1962. Although it was reopened at some point, it is currently idle.
According to the Utah Geological Survey, Utah does not mine any of these prohibited materials. Surprisingly, China continues to be the primary source for these essential elements. Specifically, China supplies 54% of the germanium required by the United States, which is a crucial component in infrared technology and fiber optics. Additionally, gallium, utilized in semiconductors, has not been mined in the U.S. since 1987. It is believed that the majority of gallium is used in smartphones and other computer devices, while over half of the germanium is utilized in infrared optics and fiber optics.
According to the Institute for Energy Research, the concept is straightforward.
The Biden-Harris administration has taken further measures to restrict technology trade with China. This includes the prohibition of selling specific types of chips and machinery, as well as adding 140 Chinese companies to a restricted trade list. Officials from the administration state that these limitations are part of regular updates to existing restrictions, aimed at closing loopholes that certain businesses have exploited to bypass the regulations.
The institute has taken its third action against China, aiming to hinder its progress in catching up to the United States in developing advanced chips for military equipment and artificial intelligence.
Managing a relationship can be challenging, especially when it comes to setting boundaries and limitations.
According to the institute, the Chinese government exercises control over the supply chains of critical minerals and rare-earth elements. This control is maintained through various means such as subsidies, the use of slave labor, and the purchase of ore from Africa and Latin America. The institute further argues that the policies implemented by the Biden-Harris administration, which make it more challenging to mine for these minerals in the United States and promote the use of “green” technologies, are inadvertently aiding China in expanding its market power.
Japan, China, and Germany are the main sources of gallium imports for the United States. Japan supplies 26% of the imported gallium, followed by China at 21% and Germany at 19%. Additionally, there are smaller suppliers that contribute to the overall gallium imports.
According to the institute, although there are domestic deposits of these minerals in the U.S., they have not been extensively mined. However, there are ongoing projects that are currently exploring methods to extract them.
Researchers are currently engaged in the extraction of valuable elements from an old coal mine in West Virginia and a lignite mine in North Dakota. Perpetua Resources is also making strides in the development of an antimony mine in Idaho, thanks to the support of the U.S. government. In fact, the company was awarded a $510,500 grant from the Department of Defense. This development is crucial, considering that China, Russia, and Tajikistan currently dominate 90% of the global antimony supply.
According to Markus Roas, a metals business manager at Indium Corporation, the United States had only a week’s worth of germanium and gallium remaining back in September, even before the total ban was put into effect. Prior to this, the exports of gallium and germanium had significantly decreased.
According to the Sourceability article, the cost is not even taken into consideration. Following the partial ban on antimony in August, the price of antimony trioxide has skyrocketed, reaching over $39,000 per metric ton, more than doubling its previous price.
Christopher Ecclestone, a principal and mining strategist at Hallgarten & Company in London, commented on the recent restrictions on antimony exports by Beijing, saying, “It’s a sign of the times. The military uses of antimony are now driving the market. With everyone needing it for armaments, it’s more beneficial to hold onto it rather than sell it. As a result, this will significantly impact the U.S. and European militaries.”
United States Antimony Chairman Gary Evans has emphasized that antimony prices are consistently reaching new record highs due to a prolonged period of limited supply. He highlights that this price surge is driven by the depletion of domestic antimony resources in China and other regions.
The ban poses a significant challenge for semiconductor manufacturers in the upcoming months. With consumer demand remaining stagnant for the past two years and further aggravated by the global semiconductor shortage, numerous companies are expected to face difficulties in maintaining their operations. The increased demand for electronics, driven by the rise of artificial intelligence, has made access to crucial raw materials like gallium, germanium, and antimony even more vital.
The fallout is dramatic, much like any codependent relationship that is starting to spiral downward.
According to The Diplomat, the U.S. economy could face a multibillion-dollar impact due to the supply disruptions caused by China’s new export ban. For instance, the U.S. Geological Survey has estimated that if China were to halt all exports of gallium, it could lead to a decline in the country’s gross domestic product of up to $8.2 billion.
China’s export ban on minerals has immediate consequences for the U.S. defense industrial base. As a result, there could be short-term mineral shortages and higher prices. It is crucial to recognize the seriousness of this situation, as mineral shortages can hinder defense manufacturing and weaken the military’s capabilities, as was witnessed by the United States during World War II.
The U.S. military emerges as a crucial casualty in the ongoing trade war, as highlighted by the Center for Strategic and International Studies.
According to a statement, China is making substantial investments in munitions and acquiring advanced weapons systems and equipment faster than the United States. The statement also highlights that China is operating in a wartime posture, while the United States is operating in a peacetime posture.
It further emphasizes that even before the implementation of new restrictions, the U.S. defense industrial base lacked the capacity and surge capabilities to meet defense technology production needs. The statement warns that banning vital mineral inputs will only allow China to outpace the United States in building these capabilities.
