US Department of War Pledges US$174 Million for New Gallium Plant

The US Department of War (DoW) has announced an estimated US$174 million investment for Alcoa's (NYSE:AA) Wagerup alumina refinery.

Executed by the Office of the Assistant Secretary of War for Industrial Base Policy, the investment falls under the Industrial Base Analysis and Sustainment (IBAS) program, a 2014 program that aims to restore and strengthen the defense industrial base.

The initiative is a multinational partnership with Export Finance Australia (EFA), the Government of Japan and Sojitz Corporation. The amount will be dedicated to the construction of a new gallium production facility with an annual production target of 100 metric tons.

"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 the Honorable Michael Cadenazzi, Assistant Secretary of War for Industrial Base Policy.

Alcoa of Australia will be in charge of the planned production plant, which is expected to create up to 200 local construction jobs and approximately 20 permanent roles once operational.

“(We are) proud to work alongside our partners in Australia, Japan and the United States to help diversify the global gallium market,” said Alcoa Australia President Elsabe Muller in a company release.

Classified as a critical mineral in Australia, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) called gallium among the country’s “unsung critical minerals” given its role in high-tech applications such as the production of high-speed semiconductor chips and LED.

“Despite gallium being as abundant on earth as copper, it never occurs at high enough concentrations to mine. It occurs in small but appreciable quantities in bauxite which is the main ore source of alumina,” the CSIRO added, stating that small amounts of gallium are valuable given an approximate global demand of 700 tonnes.

Located roughly 150 kilometers south of Perth, Western Australia, Alcoa’s Wagerup alumina refinery is one of the company’s two alumina refineries which produced about 44 percent of Australia’s alumina in 2025.

The construction of the new gallium plant within the refinery aligns with Australia’s goal to build a domestic source of gallium supply outside of China and assist in the overall advancement of new, reliable sources.

IBAS has invested over US$2.6 billion across more than 200 projects since 2014. “Securing a reliable supply of gallium is essential,” the DoW said. “This (gallium production plant) project works to build long-term resilience in the existing global supply chain.”

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.