US, Japan Pour Billions Into China-Proof Minerals Supply — SkimNews
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- The US Department of Defense announced a $174 million equity investment on August 31 to build a gallium production facility at Alcoa Corporation's Wagerup refinery in Australia, backed by Japan's Sojitz Corporation and Export Finance Australia, aiming to supply 100 metric tons annually for radar and missile defense systems.
- The US Department of Energy said August 20 it would invest $500 million in seven projects to expand America's critical minerals processing, battery manufacturing and recycling capacity through its Office of Critical Minerals and Energy Innovation.
- Beijing and Washington are set to discuss whether to extend their one-year trade truce before it expires in November, and any breakdown could prompt China to tighten its export restrictions further, deepening the squeeze on global supply chains.
- China's export curbs have driven indium prices from about $250 per kilogram to about $805 per kilogram since February 2025, while Western warehouse prices for gallium (~$2,100/kg) and germanium (>$6,000/kg) dwarf domestic Chinese prices of roughly $247 and $3,100 respectively.
- Japan's rare earth imports from China fell 51% year-on-year in the first half of 2026 — more than triple the 16% drop in Beijing's overall rare earth exports — with Japan receiving no gallium or germanium shipments in January, February, or June.
- Pax Silica, a US-led coalition launched in December 2025 with the UK, Japan, South Korea, Singapore, Australia, and Israel, has grown to 25 signatories working to lock down supply chains for AI, semiconductors, and critical minerals, though Taiwan and Canada have stopped short of full membership.
- Canada holds the second-largest reserves of critical minerals but remains underdeveloped, and the US-Canada tariff dispute — with Washington imposing 50% tariffs on Canadian goods last month — threatens to undermine the Western rare earth alliance, according to the Semiconductor Council's Paul Slaby.
Why it matters: The US is committing real money — $174M for gallium and $500M for processing — to break China's grip on critical minerals, but the November truce deadline and 50% tariffs on Canada risk fracturing the Western alliance needed to replace it. Indium prices have more than tripled and Japan's rare earth imports from China fell 51% YoY in H1 2026, already reshaping AI chip supply chains from Nvidia downstream.
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