A London-based independent provider of market intelligence reported that China's recent implementation of export controls on gallium and germanium had triggered conversations concerning the potential necessity to boost the production of these metals within Europe. However, the feasibility of such expansion remains to be determined, as it heavily depends on establishing a viable business case.
Gallium is obtained as a by-product during bauxite ore processing to produce aluminium. Similarly, germanium is a by-product of the zinc refining process. Additionally, a portion of the global germanium supply is sourced from fly ash in coal deposits.
Following China's announcement of export controls, European aluminium and zinc refineries have been approached to explore the feasibility of extracting gallium and germanium from their operations. This move comes as there is potential for expansion in this area. The US Geological Survey (USGS) reports that only 3 per cent of the germanium found in zinc concentrates is being recovered globally.
The European Union has approached several aluminium producers, including the Norwegian multinational aluminium giant Hydro based, with a proposal to explore the production of gallium from the dust extraction process in their smelters. However, Hydro has expressed concerns about the feasibility of this request due to the minimal gallium content in its alumina sourced from Brazil. As a result, producing the metal in significant quantities may be challenging for the company.
However, according to the sources, Market participants are sceptical about the viability of gallium production by aluminium producers outside China, aside from any capacity constraints. The economic prospects, particularly from a European standpoint, are still being determined. However, there is a belief that smelters could extract the by-products with only minimal increases in production costs. European primary germanium production once thrived in France and Austria, but these mining operations were exhausted and ceased approximately 25 years ago. Subsequently, no significant resurgence of this metal has occurred in the region, either through mining or extraction from coal ash in recent times.
A commodity analyst said, "The only reason Europe decided to curtail production was for economic purposes. Western countries could easily and quickly re-start the production of those two metals. New production units could be added for gallium within two to three years. However, the know-how, natural resources and skills are available."
"But to restart those operations, consuming companies must commit to long-term offtakes at prices that incentivise local production. The monetary value of the gallium and germanium contained in those high-end electronics is minimal compared with the final product's end value," the analyst added.
According to the USGS, approximately 30% of the germanium consumed worldwide is now obtained from recycled sources. This includes recovery from end-of-life products and industrial by-products.
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