{"id":5146,"date":"2026-01-21T09:21:44","date_gmt":"2026-01-21T09:21:44","guid":{"rendered":"https:\/\/profitalarm.com\/index.php\/2026\/01\/21\/gallium-rare-earths-in-focus-as-us-scrambles-to-break-chinas-grip\/"},"modified":"2026-01-21T09:21:44","modified_gmt":"2026-01-21T09:21:44","slug":"gallium-rare-earths-in-focus-as-us-scrambles-to-break-chinas-grip","status":"publish","type":"post","link":"https:\/\/profitalarm.com\/index.php\/2026\/01\/21\/gallium-rare-earths-in-focus-as-us-scrambles-to-break-chinas-grip\/","title":{"rendered":"Gallium, Rare Earths in Focus as US Scrambles to Break China\u2019s Grip"},"content":{"rendered":"<\/p>\n

As Washington accelerates efforts to secure key supply chains, rare earths and critical minerals like gallium have emerged as strategic priorities for US industry and national security.<\/strong><\/p>\n

China has long used its dominance over strategic metals to apply pressure to the US, ramping up efforts in recent years. <\/p>\n

Beijing first tightened export licenses on gallium and related materials in 2023, and then in December 2024 effectively banned exports of gallium, germanium and antimony \u2014 all critical to semiconductors, defense systems and advanced electronics \u2014 to the US by refusing licences in most cases under its dual-use export control regime.<\/p>\n

The move was widely seen as retaliation for US export controls on Chinese high-tech goods, and underscored China\u2019s leverage in critical minerals supply chains. The restrictions created shortages for American buyers and forced some to source materials indirectly through third countries to keep production lines moving.<\/p>\n<\/p>\n

In late 2025, however, China suspended its direct export ban on gallium and related metals to the US, part of a tentative trade truce following high-level talks between US President Donald Trump and Chinese President Xi Jinping. <\/p>\n

The suspension, which runs through late 2026, restores the possibility of exports, but keeps the metals on China\u2019s broader export control list, meaning shipments still require government licences.<\/p>\n

Harvey Kaye, executive chairman of privately owned US Critical Materials, says the US\u2019 vulnerability has become impossible to ignore after decades of Chinese dominance in rare earths mining and processing.<\/p>\n

\u201cThey flooded the market, made it uneconomic for others and then locked up assets worldwide.\u201d<\/p>\n

Today, China controls roughly 98 percent of rare earths processing, a concentration the US government increasingly views as untenable. Its concerns intensified last year, when China restricted exports of gallium, a metal essential to advanced semiconductors, radar systems and military hardware.<\/p>\n

\u201cThere are roughly 3,800 military uses for gallium alone,\u201d Kaye said. \u201cWhen China cut it off, the geopolitical reality became very real, very fast.\u201d US Critical Materials believes it has a potential answer.<\/p>\n

The company controls 339 claims at its Sheep Creek project in Montana, where recent sampling returned average total rare earths grades of around 9 percent \u2014 significantly higher than most North American peers. More critically, the deposit is rich in heavy rare earths and gallium, which are essential for magnets, chips and defense applications.<\/p>\n

\u201cWhat makes this deposit unique is not just the grade, but the heavies \u2014 dysprosium, terbium and gallium,\u201d Kaye explained. \u201cThat puts us in a very different strategic position.\u201d<\/p>\n

The company is positioning itself as both a resource and technology play.<\/p>\n

In partnership with Idaho National Laboratory, US Critical Materials has developed what it calls a closed-loop, environmentally benign processing method dubbed \u201crock-to-dock\u201d technology.<\/p>\n

\u201cOur goal is to go from raw material to finished product without destroying the environment,\u201d Kaye said. \u201cNo effluent, no waste \u2014 and critically, processing done in the US.\u201d<\/p>\n

He added that the company expects visibility to early production and revenue as soon as 2026, helped by underground mining methods that avoid large open pits and minimize surface disturbance.<\/p>\n

Federal interest is already building. Kaye confirmed discussions with multiple US agencies, including the Department of Defense, and said the company is open to government investment and offtake agreements.<\/p>\n

\u201cFound in America, processed with American technology and available now \u2014 that changes everything,\u201d he said.<\/p>\n

Looking ahead, Kaye expects greater collaboration across the US rare earths sector as policymakers push for supply chain resilience. \u201cAt this stage, we\u2019re all Americans,\u201d he said. \u201cCompetition matters, but cooperation matters more.\u201d<\/p>\n<\/p>\n

\n

Geopolitics, trade friction and the push to rewire rare earths supply chains <\/h3>\n

Rising geopolitical tensions between China, the US and Europe are accelerating changes in global rare earths trade flows, with long-term implications for supply security as 2026 approaches.<\/p>\n

\u201cWhether rare earths are truly \u2018critical\u2019 for individual nations is almost beside the point,\u201d the expert said. \u201cWe seem to have decided, politically, to weaken trade between major powers. If we\u2019re going to do that with China, we need to be prepared for continued supply instability in rare earths.\u201d<\/p>\n

That instability leaves western economies with two broad options: rebuild China\u2019s vertically integrated rare earths supply chain at home \u2014 at a higher cost \u2014 or reduce dependence on rare earths altogether via new technologies.<\/p>\n

\u201cEither we recreate the Chinese supply chain in miniature and accept higher prices, or we innovate our way out of the problem,\u201d Hykawy said. \u201cThat question is still very much open.\u201d<\/p>\n

Technological change is already offering potential pathways. Hykawy pointed to advances in electric motor design, including axial flux motors developed by YASA, a subsidiary of Mercedes-Benz Group (ETR:MBG,OTCPL:MBGAF). <\/p>\n

Unlike conventional cylindrical electric vehicle motors that rely heavily on rare earth permanent magnets, axial flux designs use magnets more efficiently and may, in some applications, replace them with electromagnets.<\/p>\n

\u201cThese motors require better materials and more precise machining, but they use magnets far more efficiently,\u201d he said. \u201cIn some cases, they may even eliminate the need for rare earth magnets altogether.\u201d<\/p>\n

The example highlights how innovation could soften demand growth for certain rare earths over time, though cost and scalability remain barriers. At the same time, Hykawy argued that western efforts to localize rare earths mining, processing and magnet manufacturing are realistic, but will take patience.<\/p>\n

\u201cWe are only at the beginning of building a rare earth supply chain entirely outside of China,\u201d he said. \u201cThere is absolutely nothing that prevents us from doing it except time and money.\u201d<\/p>\n

Contrary to popular belief, Hykawy said rare earths mining is not more environmentally damaging than other forms of mining, noting that deposits \u2014 including ionic clays rich in heavy rare earths \u2014 exist well beyond China\u2019s borders.<\/p>\n

\u201cThe real constraint is people,\u201d he said. \u201cWe need experienced operators, engineers and processors, and there is no shortcut for the time it takes to build that expertise.\u201d<\/p>\n

As trade frictions persist, Hykawy expects supply diversification to continue, but warned that near-term volatility is likely to remain a defining feature of the rare earths market through 2026.<\/p>\n<\/div>\n

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n

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