The US Department of Defence has reportedly directed USD 29.9 million to ElementUSA for establishing a demonstration facility aimed at producing gallium and scandium on American soil, with a strong focus on leveraging alumina refining. The goal of the project is to ramp up domestic production of processed critical minerals and derivative materials.
Initial development of the project will take place in Cedar Park, Texas, forming a two-state effort to revive processing capacity; the US has largely surrendered over decades.
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At the heart of the decision is the Pentagon’s concern over its supply chain vulnerabilities. Mike Cadenazzi, Assistant Secretary of Defence for Industrial Base Policy, described gallium and scandium as fundamental to multiple defence platforms, noting that expanding domestic output is now treated as a Department of War priority.
The contract is one of 18 awards issued this year under the Defence Production Act Purchases Office, contributing to a combined allocation of US$887 million. Funding stems from Executive Order 14241, signed in March 2025 to speed up American mineral production, and is backed by appropriations from the Additional Ukraine Supplemental Appropriations Act of 2022.
China’s control of the market remains the central risk
The Pentagon’s concern is not theoretical. China controls around 98 per cent of global primary low-purity gallium production, a dominance built through the extended policy choices that tied gallium recovery to the country’s aluminium sector. The result is a tightly integrated supply chain that allows Chinese producers to set prices based on byproduct economics, a structure few other nations can match.
The United States, by contrast, has no active commercial gallium production and lacks any government stockpile, leaving American defence manufacturers exposed to the threat of Chinese export restrictions.
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Scandium supply carries its own uncertainties. China provides roughly three-quarters of global output, with Russia and the Philippines far behind. The metal must pass through several processing stages before reaching industrial users, meaning disruptions anywhere along the chain can affect sectors such as aerospace, energy and defence.
ElementUSA’s role in rebuilding capacity
Officials say alumina refining presents the quickest route for the US to restore gallium availability, as the metal accumulates both in caustic processing solutions and in bauxite-derived red-mud residues. Yet the country lacks commercial-scale systems to extract it, a gap ElementUSA aims to fill.
The company has access to over 30 million tonnes of bauxite residue and uses a proprietary technique to isolate both gallium and scandium from this mineral-rich waste. The Pentagon sees this as an opportunity to strengthen domestic supplies of materials that support missile defence, advanced sensors, next-generation fighter aircraft and hypersonic technologies.
Jeffrey Frankston, Acting Deputy Assistant Secretary of Defence for Industrial Base Resilience, said the award will contribute directly to expanding the availability of these critical minerals. He emphasised that initiatives of this kind are central to restoring national production capabilities, reducing dependence on foreign suppliers and reinforcing the resilience of defence supply chains.
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