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The European Union (EU) is urgently urging aluminium and zinc companies to explore the production of key semiconductor metals following China’s announcement to limit the export of gallium and germanium. Beijing’s export restrictions, set to take effect in August, have prompted a scramble among Brussels, Washington, and Tokyo to find alternative sources outside Asia’s largest economy.
The EU has approached Mytilineos Energy & Metals, a Greek aluminium producer, to investigate the production of gallium as a byproduct at its refinery in Agios Nikolaos, Greece. Nick Keramidas, the executive director of EU affairs at the company, confirmed that the EU has reached out to them to evaluate potential solutions to the crisis.
Currently, the EU relies on China for 71% of its gallium and 45% of its germanium. However, there are only a few companies outside China capable of producing the high-purity metals required for chipmaking, solar photovoltaic cells, and optic fibers.
Investing in gallium production presents challenges for companies due to Europe’s struggling metals sector, high energy costs, and rising inflation. Without adequate state support, it becomes difficult for companies to invest millions of euros in gallium production.
Brussels has previously faced similar concerns about mineral supplies when China cut magnesium production in 2021 due to energy shortages. Efforts were made to boost domestic production of magnesium within the EU.
Eurometaux, the EU’s trade body for non-ferrous metals, confirmed that multiple companies are exploring ways to enhance the region’s resilience in terms of germanium and gallium supply. However, it emphasized that this issue requires a broader discussion on industrial policy.
Developing its own germanium output proves to be a greater challenge for Europe. Only zinc smelters using a specific process can recover germanium, and there are currently no European companies employing this method. However, Trafigura-owned Nyrstar is considering the construction of a $150 million germanium and gallium recovery and processing facility at its zinc smelter in Tennessee. Umicore, a Belgian advanced materials group, is also working on technologies to reduce the use of germanium.
Since China’s export restrictions, gallium prices have surged by 28%, according to Fastmarkets, a price reporting agency. However, executives emphasize the need for EU officials to develop policies to remain competitive in the event of a flood of Chinese products in the market.
Gallium and germanium are among the metals listed as strategic in a regulation under discussion aimed at boosting the EU’s critical material supplies for the green transition. China’s export controls were implemented in response to the Netherlands, Japan, and the US limiting the sale of high-end chipmaking equipment overseas.
The European Commission is conducting a detailed analysis of China’s export controls to determine their compatibility with World Trade Organization rules. The Commission urges China to base its export controls on relevant security considerations and not unrelated objectives.
Greece’s environment minister, Theodoros Skylakakis, expressed hope that Greece could become a hub for critical minerals production in Europe, partly due to Mytilineos’s potential to produce gallium from bauxite. He emphasizes the importance of protective measures to ensure the EU’s open and competitive model is not undermined by specific geopolitical situations.
This article has been amended to correct the location of Mytilineos Energy & Metals’ refinery, which is in Agios Nikolaos in mainland Greece, not Crete.
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