US, Australia and Japan Bankroll Alcoa Gallium Plant to Chip Away at China's Near-Total Grip

Construction is underway at Alcoa Corporation's Wagerup alumina refinery in Western Australia on a new gallium production facility, backed by the governments of the United States, Australia and Japan. The effort is the latest move in a multi-year campaign to break China's grip on a metal almost nobody outside the mining and defense world has heard of, but that shows up in radar systems, 5G towers and missile guidance electronics.

Alcoa approved a final investment decision on July 14, 2026, and broke ground roughly six weeks later on August 25, according to Crypto Briefing and Discovery Alert. The New York Stock Exchange-listed aluminum producer plans to pull about 100 metric tons of gallium a year out of the refinery, which Crypto Briefing says could represent up to 10% of global supply from a single site.

Who's paying, and how much

Crypto Briefing puts the US equity contribution at $93 million, coming directly from the Department of Defense with offtake rights attached. Mining.com, citing a statement from the agency, reports $174 million in financing from the "Department of War" — the Trump administration's rebranded name for the Pentagon, not a separate entity.

Both figures come from the same US government source. The gap could reflect equity versus total financing, or different stages of the deal being disclosed at different times. Neither Crypto Briefing nor Mining.com reconciles the two numbers, and Alcoa itself, according to a report from miningsee.eu, has not disclosed the project's total capital expenditure, government contribution breakdown, or contracted offtake volumes even after the final investment decision was announced.

Australia is putting in the most money on paper: up to $200 million in concessional equity financing, according to Crypto Briefing, which also secures Canberra offtake rights on the metal produced. Japan rounds out the group through JAGA, a joint venture between trading house Sojitz Corp and JOGMEC, Japan's state-backed energy and metals security agency, per Mining.com and miningsee.

Michael Cadenazzi, assistant secretary of war for industrial base policy, called the deal a way to "secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come," in a statement reported by Mining.com.

Why gallium, why now

Gallium doesn't come from its own mines. It's a byproduct recovered from bauxite ore during aluminum refining, at concentrations of roughly 50 to 100 parts per million, according to Discovery Alert. Wagerup can produce it without any new mining, just an added recovery process bolted onto Alcoa's existing operation.

China's dominance here is close to total. Crypto Briefing and Mining.com both put China's share of refined gallium at around 98%, while Discovery Alert cites a slightly wider range of 80% to 90%. Beijing imposed export controls on gallium in 2023 and, according to Mining.com, banned direct shipments to the US outright the following year. Gallium arsenide and gallium nitride semiconductors built with the metal power 5G infrastructure, radar and electronic warfare systems, which is why the money is coming from the Pentagon's industrial-base office rather than the Commerce or Energy departments.

The Wagerup project isn't an isolated bet. According to a newsletter from nasdaqprivatemarket citing Reuters, the Pentagon's Office of Strategic Capital announced roughly $3 billion in new funding for battery and critical-minerals companies in early August 2026 alone, part of a broader push spanning the Department of Defense, the Department of Energy's Office of Energy Dominance Financing, the Commerce Department's CHIPS Act programs, and the US Export-Import Bank.

A separate example: the Epoch Times reported that Sunrise, an ASX-listed mining company, landed a conditional US government commitment of up to A$570 million (roughly $400 million) tied to its Syerston deposit in New South Wales, one of the world's largest high-grade scandium reserves. Scandium, like gallium, is overwhelmingly Chinese-controlled — 80% to 90% by the Epoch Times' estimate — and is used in ultra-strong aluminum alloys for fighter jets and in fuel cells for AI data centers. China announced export curbs on it last year, also citing dual military and civilian uses.

The fair question here

There's a legitimate concern worth stating plainly: is the Pentagon writing equity checks into foreign-based mining ventures good use of defense dollars, or is this the government picking industrial winners with taxpayer money, something free-market conservatives have historically opposed? Alcoa itself has said its role as construction and operating manager isn't expected to materially affect its own financial results, according to miningsee, meaning the risk and reward here sit mostly with the governments, not the company's shareholders.

The counterargument from Washington, Canberra and Tokyo is that this isn't conventional industrial policy, it's a national security patch for a supply chain China has already weaponized once through export bans. Whether that distinction holds up depends on details Alcoa has not yet released: actual capital costs, the final contracted offtake splits, and a firm production start date. Until those numbers surface, the $93 million-versus-$174 million discrepancy in what Washington itself is reporting remains unresolved.