The US Department of Defense has committed $29.9 million to ElementUSA for the establishment of a demonstration facility in Gramercy, Louisiana. This facility aims to separate and purify gallium and scandium from existing industrial waste streams, supporting a significant initiative to enhance domestic production of critical minerals.
This investment is part of a broader administration strategy to bolster national capabilities in processing critical minerals and their derivatives. Initial project development will occur at ElementUSA’s Critical Resource Accelerator located in Cedar Park, Texas.
Mike Cadenazzi, Assistant Secretary of Defense for Industrial Base Policy, emphasized the importance of gallium and scandium, referring to them as vital minerals for a variety of defense manufacturing sectors. The push for domestic production of these minerals is a priority for the Department of Defense, reflecting the importance of self-reliance in defense capabilities.
The contract is one of 18 awarded under the Defense Production Act (DPA), with this year’s total reaching $887 million. Specifically, this DPA Title III award is a response to Executive Order 14241, which aims to elevate American mineral production as part of national security strategy. The funding for this initiative is provided through the Additional Ukraine Supplemental Appropriations Act of 2022.
The reliance on gallium and scandium is significant in US defense realms, particularly for missile defense systems, advanced sensory technologies, next-generation fighter aircraft, and hypersonic weaponry, attributing to their excellent high-temperature resistance and electronic attributes. However, the U.S. faces a pressing challenge as it does not currently produce gallium commercially and lacks a government stockpile, raising vulnerabilities to supply chain disruptions and the potential for stringent Chinese export controls.
China’s dominance in the market is substantial, producing approximately 98% of global primary low-purity gallium, mostly recovered as a byproduct during bauxite and zinc processing. This has notably placed Beijing in a powerful negotiating position over the global availability and pricing of gallium. The Chinese monopoly is not attributed to superior natural resources but rather strategic policy decisions taken decades ago to integrate gallium recovery in aluminum refining processes.
Similarly, the global scandium market presents significant risks, with China accounting for around 75% of production. The reliance on intermediary processing stages for scandium further amplifies vulnerability to geopolitical tensions, impacting sectors such as aerospace, energy, and defense.
In the US, alumina refining is viewed as the most effective route to rebuild its gallium stockpile, as most gallium dissolves during processing, leaving traces concentrated in bauxite residues. However, the U.S. currently lacks the capacity to recover gallium from these streams at a commercial scale, although initiatives like ElementUSA’s project are set to address these gaps.
ElementUSA has access to over 30 million tons of mineral-rich bauxite residue and uses a proprietary method to extract gallium and scandium. Jeffrey Frankston, Acting Deputy Assistant Secretary of Defense for Industrial Base Resilience, stated that enabling ElementUSA to recover these minerals from processing waste will significantly contribute to the DOD’s efforts to expand the supply of essential materials for defense applications.
These contracts are seen as essential for reinstating domestic production capabilities, diversifying supply chains, reducing dependency on foreign sources, and ultimately strengthening national security.
