European companies exploring ways to boost rare metal supply

Nyrstar NV

15/11/2023 14:35

* 
      China has imposed export restrictions on gallium,
germanium
    

        * 
      Industry says underlying aluminium, zinc smelting needs
support
    

        * 
      Zinc, aluminium sectors under pressure from high energy
costs
    

  
    By Philip Blenkinsop
       BRUSSELS, Nov 15 (Reuters) - European companies are
exploring ways to replace the gallium and germanium supply put
at risk by China's export curbs after pressure from EU
authorities, but the industry says incentives will be needed to
make critical mineral production viable.
    China, which processes 80% of the world's gallium and 60% of
its germanium, imposed restrictions on exports of the metals
used in high-tech electronics from August, choking off
shipments.
    The European Commission gathered potential suppliers and
buyers last week in a bid to encourage local production, people
familiar with the meeting said. 
    Greek energy and metals group Mytilineos  MYTr.AT , present
at the meeting, said it has a pilot project to assess the most
cost-effective way to extract gallium that it could build to
scale in 18 months. 
    That could produce 40-45 metric tons of the metal a year,
roughly equal to current EU demand, it said. Gallium is
typically a by-product of processing bauxite into aluminium
precursor alumina. 
    CEO Evangelos Mytilineos said a key requirement is support
for its core aluminium business, which the industry says has in
Europe been labouring under high energy prices and levies to
come for carbon emissions.
    "We are trapped by the tools selected by the EU for the
green transition. We need massive affordable energy," Mytilineos
said.
    "We see demand is rising. The Commission needs to provide
incentives to go for it." The company said EU-supported
contracts for difference that ensure future prices could help.
    European primary aluminium production fell by a third from a
peak in 2008 to 2022. Smelters of zinc ore, from which germanium
is a by-product, face similar pressure from energy costs.
    Belgian zinc producer Nyrstar  NYR.BR  has said it is
looking into potential projects for gallium and germanium
recovery in Europe, although is more advanced in its search in
the U.S., with a $150 million project in mind.
    The EU's Critical Raw Materials Act, which will set targets
for mining, recycling and processing of 17 key materials, is
likely to enter force in the coming months. 
    The European association for non-ferrous metal producers
Eurometaux said it needed to be backed by funding and measures
to cut operating costs for the industry.
    Eurometaux said the issue was broader than just gallium and
germanium supply, and the EU needed to create conditions for
future operations to be viable.
    "Last year it was magnesium, last month graphite, and we
don't know what metals will be next. We in Europe need to move
from reactive to proactive mode, preparing for future shocks,"
it said.

 (Reporting by Philip Blenkinsop; Editing by Jan Harvey)
 ((philip.blenkinsop@thomsonreuters.com; +32 2 585 2869:
@reutersPhilB;))