China exported zero gallium and germanium in August. One possible reaction is that there’s no cause for alarm; shipments were double the usual size in July. Another is, as with the Hitchhiker’s Guide bowl of petunias, “What, again?” For the cause here is that the Chinese government began limiting those exports from August 1 – just as they did with rare earths back in 2010.
The reason given then was environmental protection – something China then lost the subsequent World Trade Organization case on. After all, China didn’t stop mining or processing rare earths, only exporting the intermediate materials. You could build whatever you liked using these resources inside China and then export that finished product.
Today the reason given for the export ban is that gallium and germanium have dual use applications, given their role in military technology. So exports must be licenced under such restrictions. It’s true that gallium and germanium are dual use materials – but lead be made into bullets and we’d all look very askance at imposing these sorts of export restrictions upon an ingot of lead. Rather than accepting China’s stated rationale at face value, most, sensibly, believe them to be a reaction to the ban on shipping advanced semiconductor manufacturing equipment into China on those same national security grounds.
Whatever the legal form of the restrictions, the economic outcome is going to be the same. As I pointed out in 2010 – when I was one of the few to do so – the Western world will roll up its sleeves, create a new supply, and the problem will be solved. With rare earths, prices were below levels seen in 2009 – before China’s restrictions – by 2014. With germanium and gallium, China’s export ban will again cause a several year blip, nothing more.
For the little secret about both – in fact the little secret about near all minerals and metals – is that there’s no shortage of them out there. Given the size of the planet and the reality all of it is made from the same 90 elements, it’s difficult for there to be such an absolute shortage. There can be – and is in this case – a shortage of plants that extract and refine, but not of the base material. So, the solution is a couple more plants to extract and refine gallium and germanium. Problem solved.
Yes, this is simple; no, I am not being simplistic.
It’s is always true that there are many ways to gain access to an element. We use whichever mineral and process looks least bad at the time we do it. It is possible to run out of that particular mineral and at that point we then simply move to the next least bad of the other available sources.
At the moment for gallium, that least bad alternative is a Bayer Process plant. This is where we, essentially, boil bauxite in caustic soda, or lye, to get the alumina with which we then make aluminium. We do this on a large scale too, perhaps 400 million tonnes of bauxite a year (note, all numbers here are rounded, but all have the right number of digits). It should not surprise that boiling in lye puts many other metals into solution – like the 50 to 100 parts per million of gallium in the bauxite. It’s a truism that once something’s in solution it’s possible to collect it – and that’s exactly what we do: Install the right gadget on the side of the Bayer plant and we collect our raw gallium.
There are a number of Bayer plants without the gadget. Of those, many are outside China – and there are about 4,000 tonnes a year of gallium running through those plants globally. As the world uses possibly 200 tonnes a year and 50 percent of that comes from the reprocessing of manufacturing scrap the world doesn’t have a lack of raw, or basic, gallium. We might need more gadgets but that’s it.
Germanium has two major sources: sphalerite being processed for zinc (which can also be a gallium source) or fly ash from coal power plants. That second source obviously has no shortage at all. As it happens, the germanium in the original coal concentrates about 10 to 1 in the fly ash going up the chimney. A little plant to get the few tonnes a year from the one power plant might cost $4 or $5 million – I have a plan for one on my desk from an old academic paper. We, again, simply do not have a shortage of raw germanium as against global usage of maybe 150 tonnes a year – again with perhaps 50 percent coming from scrap recycling.
We do have a shortage of the plants to then process this raw gallium and raw germanium up to semiconductor sorts of purities. But there’s no reason for that shortage other than the fact that China has been doing such work cheaply these past years, so Western plants have been idled. If China takes itself out of the supply chain, the world will move on. Some of those Western plants have already been spinning up again these past couple of years, and more could be built simply enough. This is all known technology, it simply requires the desire to build it rather than anything else.
For these two metals at least, we’re better off than we were with rare earths 13 years ago. For gallium and germanium, we’ve got the raw materials easily available already – with rare earths it was necessary to actually open two new mines, as happened (Mt. Weld and Mountain Pass, that second actually reopening). We also have at least the basics of the refining capacity, or perhaps better is the basics of the volume of capacity required. It’s purely a money and effort issue for the rest of the world to go back to doing for ourselves what we’ve been using China to do cheaply.
In other words, China’s new export ban is not a strategic issue, nor one that requires any intervention. Of course those building or expanding plants would welcome a relaxation of the environmental and planning paperwork, but wouldn’t everyone? We already have an entirely viable and effective set of policies in place – simple capitalist greed and the free markets to go sate it. Gallium and germanium prices are going to rise for the refined material – thus people will increase supply. We’re done and dusted.
Even the temporary price rise is a small problem in terms of financial size: $200 million a year for germanium, $100 million perhaps for gallium in terms of total markets sizes for the basic materials. This is the sort of thing that financial markets deal with in the blink of an eye.
There is just the one possible exception to this laissez-faire attitude. Gallium and germanium really are vital inputs into military machines; therefore governments might want to take a hand in accelerating the timeline of alternative sources. But that would rather validate the Chinese point of limiting exports of these minerals as dual use military supplies.