Europe can produce gallium. Who will buy it?
Metlen plans to begin producing gallium at its Aluminium of Greece complex in Agios Nikolaos in 2027, reaching 50 tonnes of annual capacity by 2028. Image: Metlen
Europe is helping to finance a major new source of gallium. A quarter of its planned output has already been sold; to an American company.
The gallium will come from Metlen’s sprawling Aluminium of Greece complex at Agios Nikolaos, on the Gulf of Corinth. The Greek industrial group plans to begin production in 2027, gradually increasing output to 50 tonnes a year by 2028. Metlen says this would be sufficient to cover current European demand.
On paper, this is precisely the kind of project Brussels has been calling for. Gallium is a critical raw material used in advanced semiconductors, telecommunications equipment, radar systems, satellites and several renewable-energy technologies. China dominates primary gallium production and controls its export.
The European Commission has recognised the Metlen gallium project as strategic under the EU’s Critical Raw Materials Act. The European Investment Bank is providing €90 million in financing towards a wider €295.5 million investment in bauxite, alumina and gallium production.
There is just one rather awkward problem. European companies do not appear particularly eager to commit to buying the gallium.
Metlen executive chair Evangelos Mytilineos told the Financial Times that European customers had been reluctant to sign long-term agreements, while buyers in the US and Japan had proved more enthusiastic. Approximately 25% of the planned annual output has already been sold under a long-term contract to an unnamed US technology company.
Europe could therefore help create a domestic supply of one of the world’s most strategically important metals, only to watch much of it leave the continent.
Why gallium is strategically important
Gallium seems designed for a classroom demonstration. It is a soft, silvery metal with a melting point of 29.76°C, meaning a small piece can turn to liquid in a warm hand.
Its real value emerges when gallium is combined with other elements.
Gallium arsenide is used in radio-frequency electronics, radar, satellite communications and high-efficiency solar cells. Gallium nitride is found in power electronics, fast chargers, mobile communications infrastructure and defence equipment. Both belong to a family known as compound semiconductors.
Silicon remains the workhorse of the semiconductor industry, but gallium-based materials can outperform it in certain demanding applications. Gallium nitride devices, for example, can switch at high frequencies and enable smaller, more efficient power systems. Gallium arsenide is particularly valuable in high-frequency and specialised electronic components.
Interesting to note here is that gallium is consumed in relatively small quantities, and that its market is minuscule compared with those for copper, aluminium or iron. Yet a shortage can still delay the production of systems worth millions and disrupt industries worth billions.
That combination of low volume and high strategic importance makes gallium a remarkably effective geopolitical pressure point.
How China came to dominate gallium production
Gallium is rarely extracted from a dedicated mine. It occurs in low concentrations in other ores, particularly bauxite, the principal source of aluminium. Most primary gallium is recovered as a by-product of alumina refining, with smaller quantities obtained from zinc-processing residues.
For years, many Western refiners decided that recovering it was not worth the additional investment. China continued expanding production and technical capacity, while inexpensive Chinese output made facilities elsewhere difficult to justify.
The result is an extraordinary concentration of supply. The US Geological Survey estimates that China accounted for 99% of global primary low-purity gallium production in 2025. Some capacity exists elsewhere, but China’s scale remains overwhelming.
That dependence became harder to ignore in 2023, when Beijing introduced export licensing requirements for gallium and germanium products. China prohibited exports of gallium to the US in December 2024, turning an obscure industrial metal into a highly visible instrument of trade policy.
Prices outside China climbed. Western buyers began stockpiling material, seeking alternative suppliers and revisiting projects that had previously appeared uneconomic.
China could also place those projects under pressure by moving in the opposite direction. A future surge of inexpensive exports could push down gallium prices and make competing plants harder to operate profitably.
Cheap Chinese gallium could therefore be almost as strategically effective as restricted Chinese gallium: one discourages alternative production, while the other exposes the dependence that results.
How Metlen plans to produce gallium in Greece
Metlen’s advantage is that it does not need to open a dedicated gallium mine. It already controls much of the surrounding industrial chain.
The group operates bauxite mines in central Greece and an integrated alumina and aluminium complex at Agios Nikolaos. The plan is to increase annual bauxite capacity to around two million tonnes and alumina capacity from 865,000 to 1.265 million tonnes, while adding facilities to recover high-purity gallium during alumina production.
A metal previously left within the processing stream can become a valuable product in its own right. Gallium production can share infrastructure, energy supplies, technical knowledge and processing facilities with Metlen's much larger aluminium operation. The company has begun pilot-scale production and samples have undergone extensive qualification testing.
Metlen claims that its gallium production cost is below $300 per kilogram and that it is working towards $100. At the time of Mytilineos’s comments, European gallium prices were reportedly above $3,000 per kilogram.
The comparison makes European hesitation seem puzzling, but production costs and market prices are not equivalent. Prices vary according to purity, form, volumes, delivery terms and the length of the contract. Buyers may also be less worried about today’s price than about committing for several years.
If China increases exports and prices fall, a European manufacturer could be left paying more than a competitor buying Chinese gallium on the open market. That is precisely the price risk a long-term agreement transfers from a new producer to its customers.
High-purity gallium is not yet a chip
Even high-purity gallium is only one part of the semiconductor supply chain.
It still has to be converted into compounds such as gallium arsenide or gallium nitride. Those materials are grown into crystals, processed into wafers and eventually manufactured into electronic components. Each stage requires highly specialised facilities and expertise.
Europe will need sufficient capacity further down the chain if gallium recovered in Greece is to end up in European radar systems, communications equipment or power electronics. A domestic source of metal reduces one important dependency; it does not create a complete semiconductor industry by itself.
Manufacturers cannot simply switch suppliers the moment another source becomes available, either. Semiconductor and defence companies require consistent purity and performance. Qualifying a new material may involve lengthy testing, particularly when a component will be used in a satellite, radar installation or another system expected to operate reliably for years.
Some of the apparent reluctance among European buyers may therefore reflect ordinary procurement cycles. The plant has not yet entered commercial production, customers may require particular specifications, and companies operating in sensitive industries are unlikely to disclose every supply negotiation.
The problem is more complicated than European businesses simply refusing to support a European producer.
Europe’s gallium supply has a buyer problem
Nevertheless, Metlen’s experience exposes a weakness in European industrial policy.
Governments want domestic critical-mineral production because dependence on one foreign supplier is dangerous. Individual manufacturers, however, are expected to remain competitive. Committing to a potentially more expensive source may make strategic sense for Europe while creating an immediate disadvantage for the company signing the contract.
The US and Japan appear more willing to treat that additional cost as insurance.
Japan has spent years building stockpiles and international partnerships for materials it cannot produce domestically. The US has become increasingly interventionist, using grants, loans, procurement agreements and government investments to support critical-mineral projects.
Europe has become better at helping companies construct new production capacity. It is less effective at guaranteeing that European industry will use it.
That may require policies extending beyond grants and favourable loans. Joint purchasing, strategic gallium stockpiles, minimum-price guarantees and supply-security requirements in publicly supported semiconductor or defence programmes could provide producers with firmer demand. Contracts for difference could protect a strategic supplier if global prices fall without forcing industrial customers to carry the entire risk.
This does not mean Metlen should be prevented from exporting. Its US agreement provides revenue, demonstrates international confidence in the material and makes the project more commercially credible. A facility serving several markets may ultimately be more resilient than one dependent on Europe alone.
Key for the EU here is that it needs to ensure dependable access to enough gallium when international supply is disrupted. There is no free version of that security, however. The cost will appear as higher purchase prices, public support and stockpiles, or as economic damage when an essential material suddenly becomes unavailable.
Further reading on MoveTheNeedle.news:
Why Europe loses critical raw materials in its e-waste
Europe's next strategic dependency may be AI itself
Why Europe's next deep-tech partnerships increasingly run through Japan