Alcoa and its Japanese industry partners have approved development of a gallium production facility in WA’s South West after gaining support from the Australian and US governments.
The gallium plant will be half-owned and funded by Japan Australia Gallium Associates, a joint venture between Sojitz Corporation and JOGMEC, aka the Japan Organization for Metals and Energy Security.
The other half of the funding will come from Alcoa, the Australian government and the US government (through its Department of War) though the equity split was not disclosed.
Resources minister Madeleine King said production capacity is anticipated to be 100 tonnes per annum, representing about 10 per cent of global demand.
A spokesperson for the Minister said the Australian government agency, Export Finance Australia (EFA), will make a $A68.9 million equity investment in the project.
That is a big change from last October when Prime Minister Anthony Albanese announced Australia would invest up to $US200 million ($A300 million) in concessional equity finance in the project.
That was after Mr Albanese and US President Donald Trump signed a framework for securing critical minerals supply, with the gallium project listed as a priority.
The minister’s spokesperson said the US government’s decision to invest in the project “has had the effect of reducing the Australian government’s equity investment”.
“This is an example of the US-Australia framework working as intended,” they said.
“Partners working together to jointly back projects of strategic significance, as part of a common objective to diversify supply chains.”
The lack of detail on the equity split makes it impossible to know the final cost.
But assuming, for illustrative purposes, that EFA earned a 20 per cent ownership stake, the total equity cost would be about $350 million.
Asked about the expected cost, Alcoa said its capital contribution, including its role as construction and operating manager, was not expected to have a material impact on the company’s financial position or results of operations.
The final investment decision for the plant comes just less than one year since Alcoa revealed it was studying this option.
The plant will be co-located at Alcoa Australia’s Wagerup alumina refinery, with the gallium to be produced as a by-product of its existing operation.
Each partner will receive off-take commensurate with their investment.
Gallium is used in advanced technologies, including semiconductors and defence applications, and global supply is currently highly concentrated.
The Australian government backing came after it provided support to Arafura Rare Earths for its $1.5 billion Nolans project.
Alcoa said construction activities are expected to commence following final site preparations.
Alcoa’s US-based president William F Oplinger said the final investment decision reflected a shared commitment by governments and industry to strengthen critical mineral supply chains.
“The project underscores the strategic importance of Western Australia and the role Alcoa’s operations play in delivering critical materials essential to the global economy,” he said.
