PERTH, Australia — The U.S. Department of War has announced an estimated $174 million equity investment to support construction of a new gallium production facility at Alcoa’s Wagerup alumina refinery in Western Australia.
The facility is projected to produce 100 metric tons of gallium metal annually, representing up to 10 percent of global supply.
Multinational Partnership
The project involves the United States, Australia and Japan. Alcoa of Australia will construct and operate the facility in partnership with Export Finance Australia, the Japanese government and Sojitz Corporation.
Australia is expected to provide up to $200 million in financing for the project. The U.S. investment is being managed by the Office of the Assistant Secretary of War for Industrial Base Policy through the Industrial Base Analysis and Sustainment (IBAS) program.
The U.S. financing gives the Department of War an equity position in the facility. The final dollar value of the investment will remain subject to exchange-rate movements when the transaction is completed.
“This landmark agreement with our key allies, Australia and Japan, will secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come,” said Michael Cadenazzi, Assistant Secretary of War for Industrial Base Policy.
Gallium Production at Wagerup
The facility will recover gallium as a byproduct of Alcoa’s existing bauxite and alumina refining operations using ion-exchange technology. No additional bauxite mining will be required.
The plant will occupy about 4 hectares of already cleared land at the Wagerup site, located approximately 120 to 150 kilometers south of Perth.
A final investment decision was reached in July 2026, while construction began in late August 2026. The project is expected to create up to 200 construction jobs and approximately 20 permanent positions once operational.
Partners are expected to receive offtake rights proportional to their interests.
Importance for Defense and Supply Chains
Gallium is used in high-performance semiconductors for advanced aircraft and maritime radars, ground-based missile defense systems, secure satellite and tactical communications, electro-optical and infrared sensors for missile guidance and thermal imaging, and solar cells used by military and civilian satellites.
The project is intended to strengthen the global gallium supply chain after China introduced export restrictions on gallium in 2023. China accounts for roughly 98 percent of global gallium production, making alternative sources a priority for the United States, Australia and Japan.
The planned 100-metric-ton annual output would represent up to 10 percent of global supply.
U.S. Defense Industrial Base Investment
The U.S. investment is being made through the IBAS program, which was established in 2014 to restore and expand production capacity supporting the defense industrial base.
Since its creation, IBAS has invested more than $2.6 billion across over 200 projects.
Alcoa will construct and operate the Wagerup facility, and its participation is not expected to have a material impact on the company’s overall financial position or results.
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