Spodnji članek je izjemen. Prebrati bi si ga moral vsak zahodni politik in vsakdo, ki se ukvarja z analitiko. Članek na primeru zgolj enega izmed 21 elementov redkih kovin, nepogrešljivih za sodobne tehnologije, pokaže, kako sistematično, strateško in globoko je Kitajska zaklenila proizvodnjo tehnološko naprednih izdelkov pod svoje okrilje. Zahodne države bi potrebovale tisoče milijard (dolarjev ali evrov) in nekaj desetletij, da bi nadomestile zaostanek pri pridobivanju in procesiranju teh redkih kovin.

In ne pozabite, da bi ta naložba v višini 140 milijard dolarjev in 12-letni časovni okvir prinesli le 100 ton galija letno – kar predstavlja le 17 % trenutne kitajske proizvodnje in manj kot 14 % njihove proizvodne zmogljivosti, kar je spet le EDEN od 21 kemičnih elementov, za katere je Kitajska uvedla nadzor nad izvozom.

Kitajske izvozne licence za redke zemlje so resnično težak glavobol za vse zahodne politike. Šah mat. Zanimivo je, da nihče te potencialne vendar realne grožnje v zadnjih dveh desetletjih ni jemal resno. In prav zanimivo bo gledati, kako se je bodo zahodni politiki lotili oziroma kdaj bodo po neštevilnih neprespanih nočeh in kalkulacijah priznali nemoč. Nato se bomo lahko začeli pogovarjati o geokonomskih in geopolitičnih strategijah in kako nadaljevati to strateško globalno sobivanje.

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This is probably the most important geopolitical question in the world right now: for how long can China play the “rare earths card”?

It’s now well established this gives China considerable leverage. For one thing the frantic state of panic of US Treasury Secretary Bessent over the past couple of days is a pretty big tell: he publicly insulted senior Chinese officials over the move, lobbied for “emergency powers” and said this was a Chinese attack on the “world” that would meet a “fulsome group response” from the U.S. and its allies. If that’s not Washington being rattled, I don’t know what is.

What seems to be the consensus view, because I’ve seen it mentioned over and over again, is that one of the main bottlenecks to break this rare earths stranglehold is environmental regulations. As the narrative goes, the West essentially regulated itself out of the rare earths business by imposing environmental standards that China simply ignored. And so, by implication, all it would take is the right regulatory changes and government subsidies and the problem is solvable within a few years or so, it’s mainly a question of political will to accept environmental trade-offs.

There is some degree of truth in that – rare earths processing can be very polluting – but this is otherwise very much magic bullet thinking.

The difficulty of breaking the rare earths stranglehold is far – FAR – more immense than mere regulatory adjustments. China’s dominance has much more to do with the scale of their manufacturing and the vertical integration of their supply chains, and as such breaking the stranglehold at this stage requires upgrading the West’s industrialization level comprehensively. We’re talking something requiring a complete makeover of the West’s socioeconomic structure, involving trillions in capital in investment – with profitability perhaps two decades away – as well as a profound upending of its education system. In short, a generational-level undertaking on an almost unprecedented scale.

You might be tempted to compare the efforts needed to the Manhattan Project or the Apollo Program – that’s mighty enough, right? – but that would actually be vastly understating it. The amount of efforts needed is more comparable to something like the Industrial Revolution itself than to any individual megaproject.

You don’t believe me, right? Surely I must be exaggerating! No way it can be that dramatic!

That’s why I wrote this article. To show you in details the absolutely titanic efforts that would be needed to break the stranglehold for just one of the elements on China’s list of export controls: gallium. And bear in mind when you read the article that it’s just ONE chemical element out of 21 under export controls, and that China’s export controls don’t only include chemical elements but also downstream products (lithium-ion batteries, superhard materials, etc.)

After finishing this article, I bet Bessent’s panic will feel almost understated to you.

What is gallium?

Gallium is not actually a rare earth: it’s a soft, silvery metal that would literally melt in your hand on a warm day. Yet it’s one of the most strategically important materials in the world today, as it’s – among other applications – foundational to the latest generation of GaN semiconductors, as well as modern AESA military radars that can detect targets at nearly double the previous range. A top Raytheon executive noted in 2023 that “GaN is foundational to nearly all the cutting-edge defense technology that we produce.”

China has cornered a staggering 98 percent of the worldwide primary low-purity gallium production, meaning it has near-total control over the material.

What would it take to produce 100 tons of gallium?

Let’s ask ourselves a simple question: what would it take to produce 100 tons of gallium? It’s not a huge amount: China produces 600 tons of it, with a production capacity of 750 tons so we’re talking less than 17% of China’s current production.

Understanding gallium production

Many people imagine gallium extraction works like mining any other metal: find a deposit, dig it up, add some chemicals, extract the metal. But gallium is fundamentally different – it’s not found as an independent ore but is recovered as a byproduct of aluminum production.

Think of it like juicing oranges: gallium is like the small amount of essential oil that clings to the orange peel. Without the juice factory processing massive quantities of oranges, you have no practical way to obtain that essential oil separately. You can’t just “mine gallium”- you need an entire aluminum industry running at scale to capture the trace amounts that emerge.

To understand the scale involved, consider China Aluminum Corporation (“Chalco”), the world’s largest aluminum producer: in 2022, they processed 17.64 million tons of alumina from which they refined 6.88 million tons of primary aluminum and finally extracted 146 tons of gallium – a ratio of approximately 1:47,000 for gallium-to-aluminum, or 1:120,000 for gallium-to-alumina.

Building alumina refineries and aluminum smelters

The ratios we just saw mean that, to produce 100 tons of gallium, you would first require a proportionate aluminum industry capable of producing 12 million tons of alumina and 4.7 million tons of actual aluminum annually. That’s your first step.

For reference China today has 60% market share of global aluminum production, India is a very distant second with only 3.5 million tons of aluminum (refined from alumina) produced in 2022-2023 (meaning the whole country produced only half the amount produced by Chalco, a single Chinese company) and the US produced less than 0.8 million in 2023.

So if the US wanted to become a big player in gallium, it’d first need to increase its aluminum production capacity almost 6 fold, from the current 0.8 million tons to the 4.7 million tons needed to produce 100 tons of gallium, which again would only make its gallium production less than a fifth that of China.

This involves building two types of factories: alumina refineries (which process bauxite ore into alumina) and aluminum smelters (which convert alumina into metallic aluminum through electrolysis – the stage where gallium is extracted).

Outside China, aluminum smelters costs about $4 billion per million tons of annual production, meaning we’re speaking about a $20 billion investment just for the smelters. Alumina refineries would add another $10 billion. So we’re looking at $30 billion in factory construction costs just to ramp up alumina production to the level required.

The energy challenge

There’s an issue however: convert alumina into metallic aluminum through electrolysis is extremely energy-intensive. Industry data shows that producing one ton of electrolytic aluminum consumes approximately 13,000-15,000 kWh of electricity.

The US currently produces 0.8 million tons of aluminum, so it would need to add another 3.9 million tons of capacity. How much electricity does that require? Using the lowball figure of 13,000 kWh per ton, it translates to roughly 51 billion kWh of additional electricity – flowing continuously, 24/7, 365 days a year. Aluminum smelters can’t simply shut down when power is unavailable; the molten metal would solidify in the electrolytic cells, destroying them.

What does 51 billion kWh mean? To put it in perspective, let’s look at America’s most recent nuclear project: Vogtle Units 3 and 4 in Georgia. These two reactors have a combined capacity of 2.2 GW and can produce approximately 17-18 billion kWh annually at full capacity. The U.S. would need to replicate the entire Vogtle 3 & 4 project three times to meet the 51 billion kWh requirement – essentially building six new reactors in three separate construction projects.

Cost wise, Vogtle 3 & 4 reached a final price tag of $36.8 billion after massive overruns from an initial $14 billion estimate. Three such projects would cost approximately $110 billion – and that’s before the $30 billion needed for the aluminum refineries and smelters themselves. Total infrastructure investment: ~$140 billion.

Timeline wise, construction on Vogtle 3 & 4 began in 2013, with Unit 4 finally entering commercial operation in April 2024 – nearly 11 years. Even with lessons learned and parallel construction (itself questionable given the shortage of qualified nuclear contractors and specialized equipment), a realistic timeline for three new Vogtle-scale projects extends to 2035-2036 at the very earliest.

And remember, again, that this $140 billion investment and 12-year timeline would yield just 100 tons of gallium annually – representing only 17% of China’s current production and less than 14% of their production capacity, which again is only ONE of the 21 chemical elements China applied export controls on.

The human challenge

Building the facilities is only half the battle, the greater challenge lies in finding the people to run them. U.S. manufacturing employment peaked at 19.6 million in 1979 but has declined to approximately 12.9 million by late 2024 – a loss of nearly 7 million jobs over 45 years. This isn’t merely about numbers, it also represents a fundamental erosion of the skilled industrial workforce.

And the challenge is that aluminum processing is a very worker-intensive industry. The reason is because aluminum cells are dynamic systems where conditions vary cell-to-cell and hour-to-hour, with operators making hundreds of small adjustments daily based on visual inspection, sound, and instrument readings – the kind of complex judgment calls that remain difficult to automate.

You just need to check the numbers in China, the country with the most advanced facilities and access to the latest automation technology: top still employ tens of thousands of workers for aluminum production. Chalco, which we spoke about earlier, employs 58,009 people to produce their 6.88 million tons of aluminum. China Hongqiao, the second-largest aluminum producer in the country (after Chalco), employs 49,774 people and produces approximately 6 million tons of aluminum annually.

So we’re talking ratios of about 8,500 people per annual ton of aluminum, in the most advanced facilities in the world, with Chinese working hours and efficiency. Meaning that to add another 3.9 million tons of capacity, the U.S. would need to find at the very least 33,000 additional workers just for aluminum production. With all that entails: training skilled aluminum operators requires years of hands-on experience with high-temperature industrial processes, metallurgy, and complex equipment – not skills acquired through short courses.

And I’m not even speaking about the workers needed for the energy part: 800 permanent jobs were created specifically for the new Units 3 & 4 at the Vogtle nuclear station. Three Vogtle-scale projects would require approximately 2,400 additional nuclear operations workers—engineers, control room operators, maintenance technicians, and security personnel.

Exceedingly difficult to do in a country where the manufacturing sector already faces 1.9 million unfilled jobs by 2033, and where a significant chunk of the existing nuclear workforce is likely to retire over the next decade. America would need to spend years train 35,500 specialized industrial workers for this single gallium project – representing 17% of China’s production capacity for one element – while simultaneously backfilling retirements.

The industrial ecosystem challenge

It’s not just factories, energy and people – you need a complete industrial ecosystem.

Even if you have money to build factories, technology to build power plants, and the ability to find tens of thousands of workers, there’s an even more difficult problem: supporting facilities.

Industrial production is not an island; it requires a complete ecosystem.

For example, producing alumina requires bauxite, lime, and soda ash. The US doesn’t lack lime and soda ash, but bauxite mainly needs to be imported. You need stable bauxite supply channels and ports for transportation.

Producing electrolytic aluminum requires auxiliary materials like fluoride salts and carbon anodes – factories must produce these too. You also need highways and railways to transport them to the factory area.

Once products are made, they need to be transported to ports for export or to downstream chip factories and radar factories – this requires a very mature logistics network.

These supporting facilities aren’t as simple as building a few bridges or paving a few roads. They represent a nation’s industrialization level.

China spent 40 years building the world’s most complete industrial system from scratch. From bauxite mining to alumina and electrolytic aluminum production, to gallium extraction and purification, even downstream chip manufacturing – every link has mature enterprises and supporting infrastructure.

This gap in industrial ecosystem can’t be filled just by throwing money at it. It requires time, it requires accumulation over generations, it requires the entire nation to highly value manufacturing.

The market challenge

The last, and perhaps most critical, challenge is the question of the market.

Assuming the US somehow managed to overcome all the other issues: it has built 3 three Vogtle-scale energy projects, the 2 factories, found tens of thousands of workers and developed the ecosystem around it all, it still needs to sell the stuff – both the aluminum and the gallium.

Total US aluminum consumption runs approximately 4 million tons annually, yet as we saw producing just 100 tons of gallium requires 4.7 million tons of aluminum as an unavoidable byproduct. The entire domestic market couldn’t absorb this production: even capturing every aluminum customer in America would leave 700,000 tons of surplus metal.

International markets offer no solution. Global aluminum markets already face structural overcapacity and American aluminum produced at market rates with higher costs and wages couldn’t compete with China on price. So should the U.S. sell at a loss? What sustains the operation then? Would the US government subsidize the operations year after year, keeping the project running at a loss?

This all creates an economically irrational situation where producing a strategic material (gallium) requires maintaining permanently unprofitable industrial capacity (aluminum smelting). No market-based enterprise would undertake this voluntarily. All the more since, as we just saw this requires an initial investment of $140 billion.

What about substitutes?

You’ve certainly thought about it: “if producing gallium ourselves is such a massive effort, surely we can substitute it for something else?”

The problem is that material properties aren’t negotiable. Gallium Nitride semiconductors aren’t used because they’re trendy, they’re used because silicon physically cannot do what GaN does. GaN can handle 10x the voltage, operate at frequencies where silicon fails, and tolerate temperatures that would destroy silicon chips.

Think about it, if substitutes were viable, the Pentagon would already be doing it. The US military has known about rare earths vulnerability since at least China’s 2010 embargo against Japan. That’s 15 years to find alternatives. And yet here we are, with – again – a Raytheon executive stating that “GaN is foundational to nearly all the cutting-edge defense technology that we produce.”

And even if you could substitute gallium, you’d probably find yourself in the exact same place. A substitute that’s been mentioned is Silicon Carbide (SiC) but… China controls most SiC production too, and it doesn’t match GaN for the applications that matter most.

And even if perfect substitutes existed for gallium – which they don’t – you’d still face the same problem for the other 20 elements on China’s export control list. The strategy of “substitute everything” eventually crosses into absurdity. At a certain scale, “find alternatives for 21 strategically critical materials” becomes functionally equivalent to disputing the results of the Big Bang – you’re demanding that nature provide you with different fundamental building blocks than the ones that exist.

Conclusion

Vir: Arnaud Bertrand