China Strategic Minerals Framework Tightens State Control Over 36 Resources

Strategic Minerals

China strategic minerals policy has entered a more formal phase after Beijing placed 36 mineral resources under tighter central government control. The revised regulations strengthen state oversight of mining, exploration, production quotas and strategic reserves.

China strategic minerals covered by the framework include major industrial metals, battery materials, rare earths, semiconductor metals and energy resources. The rules also include non-metallic materials such as graphite, phosphate, fluorite and high-purity quartz.

China strategic minerals regulation is significant because many of the affected materials are essential to batteries, aerospace, defence, semiconductors, energy infrastructure and advanced manufacturing.

The immediate market impact has been limited because several controls already existed in practice. However, formalising them under a single legal framework could strengthen Beijing's ability to manage supply over the longer term.

Centralised Quotas and Reserves Strengthen Supply Management

The Ministry of Natural Resources, working with the National Development and Reform Commission, will set annual mining quotas for strategic minerals.

The objective is to prevent uncontrolled production while giving central authorities greater control over national resource development.

Approvals for new exploration and mining rights will also be consolidated at the central level. Authorities will restrict the number of mining licences granted for individual deposits.

This could slow uncontrolled capacity growth in some markets while giving Beijing more influence over production timing and regional development.

The new framework also establishes a three-tier reserve system covering physical product inventories, production capacity and undeveloped resource sites.

State and private companies will jointly participate in stockpiling, while resource-site reserves are expected to remain available for at least five years.

This creates a broader security mechanism than conventional commodity stockpiles. China will not only hold material inventories but also preserve future production capability and undeveloped resources.

For strategically sensitive metals, this could provide Beijing with greater flexibility to respond to supply disruptions, price volatility or geopolitical pressure.

Rare Earths and Semiconductor Metals Gain Greater Strategic Weight

The list covers 25 metallic commodities, including iron, copper, aluminium, titanium, vanadium, manganese and chromium.

Battery materials such as lithium, cobalt and nickel are included alongside all 17 rare earth elements.

China has also designated tungsten, antimony, tin and molybdenum as strategic resources, together with semiconductor and specialty metals including gallium, germanium, indium, rhenium, niobium, tantalum, beryllium, zirconium and hafnium.

This combination is important because China already holds dominant positions across many of these supply chains.

Rare earth separation, tungsten processing, antimony, gallium and germanium are particularly sensitive because alternative global processing capacity remains limited.

The inclusion of high-purity quartz also highlights the expanding definition of strategic materials. Quartz is an important input in semiconductor and solar manufacturing, linking mineral security directly with advanced technology industries.

The framework therefore goes beyond mining policy. It strengthens China's ability to manage the upstream materials required for manufacturing competitiveness and national security.

The Metalnomist Commentary

China is moving from individual export controls and quotas toward a comprehensive strategic resources system. The long-term implication is greater state influence over not only current supply, but also future capacity and undeveloped reserves across many of the world's most critical materials.

Rapidus UK Semiconductor Centre Partnership Deepens Japan-UK Chip Cooperation

Rapidus

Rapidus UK Semiconductor Centre cooperation is expanding after the Japanese chip developer signed a memorandum of understanding with the UK Semiconductor Centre to strengthen advanced semiconductor manufacturing ties.

Rapidus UK Semiconductor Centre collaboration will focus on exchanging information and views on advanced chip technology, manufacturing ecosystems and industry development. The agreement comes as Rapidus advances its Hokkaido pilot line toward mass production of 2nm logic semiconductors.

Rapidus UK Semiconductor Centre partnership also fits a broader Japan-UK push around economic security and supply chain resilience. Both governments are placing greater strategic importance on semiconductors, critical minerals and advanced manufacturing.

The cooperation extends beyond chip fabrication. Japan is simultaneously seeking more resilient supplies of rare earths and other strategic materials needed across semiconductor equipment, electronics and high-technology manufacturing.

2nm Development Strengthens Japan-UK Technology Links

Rapidus is using its Hokkaido pilot manufacturing operation as the foundation for planned commercial-scale 2nm semiconductor production.

That places the company in one of the most technically demanding parts of the global semiconductor industry, where manufacturing capability is concentrated among only a small number of producers.

The UK Semiconductor Centre was established in 2025 to support domestic industry growth and expand international collaboration. Working with Rapidus gives the UK access to a partner directly involved in leading-edge logic manufacturing.

For Japan, cooperation with the UK broadens the technology network supporting its attempt to rebuild advanced semiconductor capacity.

The agreement could also create opportunities across equipment, materials, research and engineering. Leading-edge semiconductor production depends on a complex ecosystem including lithography, specialty gases, photoresists, advanced packaging and high-purity metals.

This makes semiconductor cooperation increasingly relevant to industrial supply chains beyond chips themselves.

Critical Minerals Security Moves Closer to Semiconductor Policy

Japan is also pushing for greater coordination among G7 countries on critical mineral stockpiling.

The proposed framework would create national stockpiling systems and link them across participating countries, improving collective resilience during supply disruptions.

The strategy is becoming more urgent as China increases control over critical mineral exports. Rare earths are especially important for magnets, electronics and semiconductor manufacturing equipment.

Japan is already working with countries including France and Australia to diversify rare earth sourcing and processing.

This creates a broader industrial strategy connecting semiconductors with upstream materials security. Building domestic 2nm capacity has limited strategic value if essential materials remain exposed to concentrated foreign supply.

Japan's approach therefore combines advanced manufacturing investment with allied sourcing, stockpiling and technology cooperation.

The Rapidus-UKSC agreement is another step toward that model, where semiconductor competitiveness is supported by a wider network of trusted industrial and mineral supply partners.

The Metalnomist Commentary

Semiconductor security is no longer only about fabs and chip design. Japan is increasingly linking 2nm manufacturing, allied technology cooperation and critical mineral stockpiling into one integrated industrial security strategy.

Ucore Rare Earth Supply Partnership Expands With Sumitomo

Ucore Rare Earth

Ucore rare earth supply strategy is gaining a major commercial partner after Ucore Rare Metals formed a strategic collaboration with Sumitomo Corporation of Americas. The agreement will support feedstock procurement, separated rare earth sales and market access in Japan.

Ucore rare earth supply development will center on the planned Louisiana Strategic Metals Complex, where the company intends to process rare earth feedstock into separated products. Sumitomo will help secure suitable raw materials and develop offtake channels.

Ucore rare earth supply plans are particularly focused on selected middle and heavy rare earth elements used in high-performance permanent magnets and advanced materials. These elements remain among the most strategically constrained parts of the global rare earth supply chain.

The partnership also strengthens links between North American processing and Japanese industrial demand while preserving material for additional processing in the US and allied markets.

Sumitomo Adds Feedstock and Japanese Market Access

Sumitomo will act as a distribution partner for designated separated rare earth products sold into selected Japanese customer segments and other industrial applications.

This gives Ucore access to an established trading network with experience across rare earth procurement, distribution and downstream customer relationships.

The collaboration is significant because building separation capacity alone does not guarantee commercial success. Rare earth refiners need reliable feedstock on the upstream side and qualified buyers for separated oxides on the downstream side.

Sumitomo already has experience building such supply chains. The company became the exclusive distributor of neodymium-praseodymium oxide produced by MP Materials in 2023.

It also established Summit Atom Rare Earth Company in Kazakhstan to produce rare earth materials containing dysprosium and neodymium.

That platform now connects African feedstock, Kazakh processing and Japanese technology through relationships with Lindian Resources and Shin-Etsu Chemical.

For Ucore, Sumitomo therefore brings more than distribution capability. It brings an existing international network spanning mining, separation and magnet-related markets.

Heavy Rare Earths Strengthen Allied Supply Chain Strategy

The partnership's focus on middle and heavy rare earths is strategically important because these materials remain highly concentrated in Chinese supply chains.

Dysprosium and other heavy rare earths are critical for permanent magnets that must maintain performance at elevated temperatures. They are widely used in electric vehicles, defence systems, aerospace and advanced industrial equipment.

Ucore's Louisiana facility is intended to provide an alternative separation route for these materials in North America.

Securing feedstock from multiple jurisdictions will be essential. A processing facility without diversified raw material supply can simply replace one dependency with another.

The Sumitomo partnership addresses that risk by combining sourcing, processing and offtake development across allied markets.

It also reflects a broader shift in rare earth strategy. Governments and companies are increasingly building interconnected supply chains across the US, Japan, Australia, Africa and Central Asia rather than relying on individual national projects.

If Ucore successfully commissions the Louisiana complex, Sumitomo's commercial network could help accelerate customer qualification and reduce market-entry risk.

The Metalnomist Commentary

Rare earth security increasingly depends on linking mines, separation plants and customers across multiple allied countries. Ucore's partnership with Sumitomo is strategically valuable because it addresses both sides of the processing bottleneck: feedstock supply and downstream market access.

USAR Rare Earth Separation Plant Starts Operations in Colorado

US rare earths

USAR rare earth separation capacity has taken another step forward after USA Rare Earth commissioned its hydrometallurgical demonstration plant in Wheat Ridge, Colorado. The facility will produce separated heavy rare earth oxides, with initial output scheduled for the third quarter of 2026.

USAR rare earth separation will target strategically important materials including dysprosium, terbium and yttrium. These elements are critical to high-performance magnets, aerospace, defence, electronics and other advanced manufacturing applications.

USAR rare earth separation is especially significant because heavy rare earth processing remains one of the most concentrated stages of the global supply chain. Developing domestic separation capability could reduce US dependence on overseas processing.

The Wheat Ridge facility will also test multiple feedstock routes, allowing USAR to process mined material alongside recycled magnet waste.

Three Feedstocks Test a Flexible Heavy Rare Earth Supply Model

The Wheat Ridge plant is designed to process three flowsheets in parallel. These include ore from USAR's Round Top project in Texas, material from the Serra Verde Pela Ema mine in Brazil and magnet swarf from manufacturing operations.

This diversified feedstock strategy is strategically important. A separation facility capable of handling both primary resources and recycled material can reduce dependence on a single mine or supply route.

Round Top provides a potential domestic US feedstock source, while Serra Verde gives USAR exposure to Brazilian heavy rare earth resources.

Magnet swarf adds a recycling pathway. Manufacturing waste can contain valuable neodymium, dysprosium, terbium and other rare earths that can be returned to the supply chain instead of being discarded.

The combination creates the basis for a more circular rare earth system connecting mining, recycling and downstream separation.

The plant's automation and real-time process monitoring should also generate technical data required for commercial scale-up. In rare earth processing, consistent purity, recovery and process control are essential before technology can move into large-scale production.

Federal Funding Supports USAR's Integrated Rare Earth Strategy

USAR has secured access to as much as $1.6bn in US government funding, providing significant financial support for its wider rare earth strategy.

The company is attempting to build an integrated supply chain extending beyond mining into separation, metals, alloys and permanent magnets.

Its planned acquisition of Serra Verde would further strengthen that structure by adding an operating Brazilian heavy rare earth resource. The transaction remains subject to regulatory scrutiny in Brazil.

Heavy rare earths are especially important because dysprosium and terbium are used to improve the temperature resistance of NdFeB permanent magnets.

These magnets are critical to electric motors, defence systems, robotics, aerospace and other high-performance applications.

For the US, securing access to ore alone is therefore insufficient. Separation capacity is essential because mixed rare earth feedstock must be converted into individual high-purity oxides before downstream metallisation and magnet production.

The Colorado demonstration plant gives USAR an opportunity to prove that capability across several feedstock types before moving toward larger-scale production.

The Metalnomist Commentary

USAR's Colorado plant targets one of the hardest bottlenecks in the non-China rare earth chain: heavy rare earth separation. Its ability to process both mined feedstock and magnet waste could become strategically valuable if the technology proves scalable.

Brazil Copper Cathode Production Adds Too Little Value, Vale Says

Vale

Brazil copper cathode production offers limited economic upside for Vale Base Metals because most of the value in the copper chain is already captured at the concentrate stage. The company argues that concentrate accounts for around 90-94% of total copper value.

Brazil copper cathode production becomes even less attractive when treatment and refining charges fall. Lower TC/RCs increase the price paid for concentrate, allowing miners to capture more value without investing billions of dollars in smelting and refining capacity.

Brazil copper cathode production therefore faces a difficult investment case despite government efforts to encourage more domestic processing of critical minerals. Vale Base Metals believes copper should be treated differently from smaller and less liquid critical mineral markets.

The debate is increasingly important as Brazil develops new incentives tied to domestic processing while Vale prepares to invest $10bn in its Carajás copper operations over the next decade.

Low TC/RCs Strengthen the Economics of Copper Concentrate

Copper concentrate pricing is closely linked to London Metal Exchange prices minus treatment and refining charges and adjustments for impurities.

When concentrate availability tightens and smelter competition for feed increases, TC/RCs tend to fall. This transfers a larger share of copper value toward miners and away from smelters.

That dynamic is particularly favourable in today's copper market. Strong demand and limited mine supply have weakened smelter economics while supporting concentrate producers.

Vale estimates that concentrate currently captures 90-94% of the copper value chain. Under those conditions, constructing a capital-intensive smelter to capture the remaining margin offers limited financial attraction.

The company believes concentrate would need to represent only around 60-65% of total copper value before downstream cathode production became sufficiently attractive.

Smelting also brings additional risks. Plants require substantial capital, energy, environmental controls and stable concentrate feed over long operating periods.

Few jurisdictions can combine those requirements with sufficiently low operating costs to make smelting consistently competitive.

For Brazil, this creates a conflict between industrial policy and project economics. Requiring downstream processing may appear to increase domestic value addition, but it can discourage investment if the additional stage generates inadequate returns.

Critical Minerals Policy Could Penalise Brazilian Copper Investment

Brazil's proposed critical minerals legislation links part of its financial incentives to domestic processing and transformation.

Vale argues that this framework does not reflect the different economics of individual minerals. Copper already has a deep, liquid global market, unlike many rare earths and smaller critical minerals where downstream processing captures a much larger share of value.

If incentives remain tied to refining, copper miners that export concentrate could lose access to substantial tax benefits despite making major domestic investments.

That could affect future project economics at a time when Brazil needs faster mine development.

Vale plans to invest $10bn in Carajás over the next decade, but the company argues that permitting speed is more important than forcing additional processing.

Copper projects in Brazil can take around 17 years to reach production. That timeline creates a major competitiveness problem as global copper demand is expected to outpace supply well before many new Brazilian projects could enter the market.

The industrial priority may therefore be to accelerate permitting, exploration and mine development rather than requiring every project to move downstream.

The Metalnomist Commentary

Vale's argument highlights a critical weakness in one-size-fits-all critical minerals policy. For copper, faster mine development may create more strategic value than forcing uneconomic smelting capacity into a market where concentrate producers already capture most of the margin.

Shin-Etsu Rare Earth Refining Plant Strengthens Japan’s Domestic Supply Chain

Shin-Etsu Chemical

Shin-Etsu rare earth refining plant plans will add new domestic processing capacity in Fukui prefecture as Japan moves to reduce its exposure to Chinese rare earth supply. The company will invest at least ¥35bn in the project, with about half expected to come from government subsidies.

Shin-Etsu rare earth refining plant development marks the company’s first new domestic refining facility since 2008. The project therefore represents a significant expansion of Japan’s downstream rare earth capability after an 18-year gap.

Shin-Etsu rare earth refining plant also builds on the company’s existing magnet and refining operations in Fukui. Shin-Etsu says it has technical capability to separate and refine 16 of the 17 rare earth elements.

The exact elements to be processed, final investment amount, location and commissioning schedule have not yet been disclosed.

Domestic Refining Supports Magnet and High-Tech Manufacturing

Shin-Etsu already uses refined rare earth materials primarily in its high-performance magnets, while supplying some material to external customers.

This gives the new project strategic value beyond standalone refining capacity. It connects separated rare earth materials directly with domestic magnet manufacturing.

Rare earth magnets are critical for electric vehicles, wind turbines, smartphones, industrial motors and semiconductor manufacturing equipment. Secure access to separated oxides and metals is therefore increasingly important for Japan’s manufacturing base.

The project could be particularly important for heavy rare earths such as dysprosium and terbium, although Shin-Etsu has not confirmed which elements the new plant will handle.

Dysprosium and terbium are used to improve the high-temperature performance of permanent magnets. Their supply is especially sensitive because global refining remains heavily concentrated in China.

Expanding domestic processing gives Japanese manufacturers another layer of protection against disruptions in imported refined materials.

Chinese Export Controls Accelerate Japan’s Supply Diversification

China’s tightening control over rare earth exports has increased urgency around Japanese supply security.

Export restrictions introduced in April 2025 affected seven rare earth elements, including dysprosium and terbium. Additional dual-use controls introduced this year have further complicated shipments to Japan.

This creates risk even for companies with diversified raw material sourcing because separation and refining remain concentrated in China.

Japan has responded by expanding financial support for domestic critical mineral projects under its economic security framework.

The expected ¥17.5bn subsidy for Shin-Etsu is the eighth project supported under the programme. Public funding is being used to reduce the commercial risk of building strategic processing capacity that may struggle to compete with established Chinese suppliers on cost alone.

The long-term objective is not complete self-sufficiency. Instead, Japan is trying to create enough alternative refining and processing capacity to prevent a single external supplier from becoming a critical industrial bottleneck.

The Metalnomist Commentary

Shin-Etsu’s investment matters because Japan is moving beyond securing rare earth resources and into the harder part of the supply chain: separation and refining. Its existing magnet expertise gives the project added strategic value by linking raw materials directly to high-performance manufacturing.

Brazil Critical Mineral Processing Lags Despite Vast Resource Base

Brazil, critical mineral

Brazil critical mineral processing remains far behind the country's resource potential despite growing political pressure to capture more value domestically. President Luiz Inacio Lula da Silva has increasingly tied future critical minerals partnerships to local processing and refining.

Brazil critical mineral processing has become more important as Brasilia seeks to avoid remaining only a raw material exporter. The lower house approved a bill in May that would provide incentives to miners that process and refine minerals inside the country.

Brazil critical mineral processing still faces major structural barriers. Industry participants say Brazil lacks sufficient mine output, processing technology, skilled workers and regulatory capacity to support large-scale downstream development.

The gap is striking. Brazil holds a significant share of global critical mineral reserves, yet contributes less than 1% of total production under government estimates.

Processing Ambitions Face Technology and Skills Gap

Brazil's first challenge is increasing upstream production before large-scale processing can become commercially viable. Significant reserves alone do not create sufficient feedstock for refineries and advanced materials plants.

The government has acknowledged that bureaucracy and limited geological information continue to slow mine development. Faster permitting and better resource data would improve access to financing and increase the number of projects reaching production.

Technology represents another major bottleneck. Different critical minerals require distinct extraction, separation and refining processes, preventing Brazil from applying a single processing model across the sector.

Rare earths present one of the most difficult challenges. Brazil has mining expertise but lacks enough engineers and technicians with experience in industrial rare earth separation and permanent magnet production.

This creates a dependency on international partnerships. Technology transfer, research cooperation and specialist investment will be necessary if Brazil wants to move from concentrate production into separated oxides, metals, alloys and magnets.

The opportunity is significant because downstream processing captures substantially more value than raw mineral exports. It can also support automotive, defence, electronics and clean energy manufacturing inside Brazil.

Regulation and Permitting Could Delay Industrial Scale-Up

Brazil's critical minerals bill could provide clearer incentives for domestic processing, but its passage through the senate remains uncertain.

Industry groups want the legislation completed before elections reshape congress. Delays could force policymakers to restart negotiations with a different group of lawmakers.

The country's mining regulator also faces severe staffing constraints. The National Mining Agency remains significantly understaffed and has thousands of economic plans awaiting review.

These bottlenecks can slow both exploration and mine development, making it harder to create the feedstock base required for downstream processing.

Brazil therefore faces a sequencing problem. The country wants processing investment, but processors need reliable mine supply, regulatory certainty, infrastructure and qualified workers before committing capital.

If those conditions improve, Brazil could use its resource base to build a much stronger industrial position in rare earths and other critical minerals. Without them, the country risks remaining primarily an exporter of unprocessed resources.

The Metalnomist Commentary

Brazil's critical minerals opportunity is enormous, but reserves alone do not create industrial power. The decisive step is building the technology, permitting capacity and skilled workforce needed to convert geology into refined materials and advanced products.

Colorado Battery Recycling Law Sets Mandatory Lithium Recovery Targets

Colorado Battery Recycling

Colorado battery recycling law introduces mandatory recovery targets for lithium, nickel and cobalt from electric and hybrid vehicle batteries. The measure creates a more structured framework for recovering critical minerals from end-of-life batteries.

Colorado battery recycling law requires recyclers to recover 50% of lithium from spent batteries by 2031 and 80% by 2035. Nickel and cobalt recovery must reach 90% by 2031.

Colorado battery recycling law will also prohibit landfilling of EV batteries from July 2029. This should push more used packs toward reuse, dismantling and materials recovery.

The legislation strengthens the commercial case for domestic battery recycling by creating clearer collection obligations and long-term recovery requirements.

Mandatory Recovery Targets Support Secondary Battery Materials

The Battery Stewardship Act requires battery stewardship organizations to submit plans covering collection, transportation, processing and recycling.

The lithium target is particularly important because recovering lithium economically has historically been more challenging than recovering nickel and cobalt.

A 50% recovery requirement by 2031 gives recyclers time to improve process efficiency before the threshold rises to 80% in 2035.

The 90% recovery requirement for nickel and cobalt sets an even higher standard. Both metals remain valuable inputs for several lithium-ion battery chemistries.

Recovering these materials can reduce dependence on newly mined supply and create more domestic secondary feedstock for battery manufacturers.

The landfill ban reinforces that objective by keeping valuable battery materials inside the industrial supply chain.

Producer Fees Could Improve Battery Collection and Recycling Economics

Battery providers will fund part of the system through fees linked to their share of battery vehicles registered in Colorado.

An initial programme fee will support implementation. Annual payments beginning by July 2030 will cover administration, enforcement and regulatory costs.

This shifts more responsibility for end-of-life batteries toward companies placing battery vehicles into the market.

The framework could also improve feedstock certainty for recyclers. Reliable access to spent batteries remains one of the biggest challenges facing the emerging US battpery recycling industry.

Over time, the legislation may encourage better pack design for dismantling, reuse and materials recovery.

If similar policies spread to other states, US battery recycling could develop around mandatory recovery standards rather than voluntary collection alone.

The Metalnomist Commentary

Colorado is turning battery recycling into a regulated critical minerals supply chain. The most important benefit may be feedstock certainty, because recyclers need predictable battery volumes as much as better recovery technology.

McIlvenna Bay Copper Concentrate Marks Eldorado’s Entry Into Canadian Copper Production

Eldorado Gold

McIlvenna Bay copper concentrate has been produced for the first time as Eldorado Gold advances commissioning at its newly acquired Saskatchewan operation. The milestone moves the project closer to commercial production targeted for the third quarter.

McIlvenna Bay copper concentrate production began on 7 June after commissioning of the processing plant. Eldorado acquired the project through its takeover of Canadian developer Foran Mining in April.

McIlvenna Bay copper concentrate gives Eldorado exposure to copper and zinc production alongside its existing gold business. The company now aims to increase processing capacity toward 4,900 t/d while stabilising recoveries and underground operations.

The first concentrate is an important technical milestone, but sustained production will depend on a successful ramp-up of the mine, flotation circuit and supporting infrastructure.

Ramp-Up Becomes the Critical Execution Test

Eldorado is now focused on increasing throughput while stabilising flotation performance. The company must also complete underground systems and paste plant work as operations move toward commercial scale.

This creates a demanding ramp-up schedule. Eldorado aims to declare commercial production in the third quarter, leaving only a limited period to increase throughput and achieve consistent recoveries.

First concentrate does not necessarily indicate stable output. New processing plants typically require time to optimise grinding, flotation, reagent consumption and concentrate quality.

The challenge is greater when underground mine development and processing systems are advancing simultaneously. Ore availability, grade consistency and plant reliability must all align before steady-state production can be achieved.

Eldorado’s acquisition of Foran also adds an organisational dimension. A project previously developed by a single-asset company is now being integrated into a larger gold mining group with broader capital and operating resources.

That could strengthen execution over time, but integration during ramp-up can also create short-term complexity.

Saskatchewan Adds Strategic Copper and Zinc Growth Potential

McIlvenna Bay gives Eldorado a new foothold in Canadian copper and zinc production at a time when western countries are seeking more secure domestic sources of critical and industrial metals.

The project is modest compared with the world’s largest copper mines, but its location and development potential increase its strategic value.

Eldorado is already evaluating longer-term growth around the asset. Exploration at the nearby Tesla zone and Bigstone deposit could support a larger regional mining platform if the initial operation performs as planned.

That makes the current ramp-up especially important. A stable McIlvenna Bay operation would provide cash flow, processing infrastructure and technical knowledge that could support future satellite deposits.

The transaction also reflects a wider mining trend. Gold producers are increasingly seeking copper exposure as electrification, grid investment and data centres strengthen the long-term demand outlook.

For Eldorado, McIlvenna Bay therefore represents more than a single mine start-up. It is the foundation of a broader diversification strategy into base metals.

The Metalnomist Commentary

First concentrate is an important milestone, but the real test begins now. If Eldorado can stabilise McIlvenna Bay quickly, the project could become the anchor for a larger Saskatchewan copper-zinc district.

Nyrstar Smelter Funding Secures Australian Zinc, Lead and Antimony Supply

Nyrstar

Nyrstar smelter funding will receive another A$105mn from Australia's federal and state governments to keep the company's Port Pirie lead and Hobart zinc operations running through at least the end of 2026.

Nyrstar smelter funding is strategically important because the two facilities support several interconnected supply chains. Port Pirie produces lead and antimony, while Hobart supplies zinc and sulphuric acid used by Tasmania's fertilizer industry.

Nyrstar smelter funding also reflects growing government concern over the loss of domestic metals processing capacity. Nyrstar had warned that both plants could face closure or curtailment without additional financial support.

The new package follows an earlier A$135mn rescue programme and comes after parent company Trafigura recorded a $241mn impairment against the two Australian smelters.

Port Pirie Could Expand Antimony Output to 5,000 t/yr

Port Pirie has lead smelting capacity of 160,000 t/yr and produces antimony as a byproduct. The new government package will fund continued operations as well as pre-feasibility and feasibility studies for further expansion.

Nyrstar expects antimony output to reach 2,000 t/yr by the end of 2026. Production could rise to 5,000 t/yr by 2028 if the expansion proceeds.

That gives Port Pirie growing strategic importance. Antimony is used in defence, flame retardants, lead alloys, batteries and other industrial applications, while global processing capacity remains highly concentrated.

Nyrstar shipped 1t of antimony from Port Pirie to an Australian manufacturer in February under commitments linked to the earlier rescue package.

The planned expansion illustrates how existing metallurgical infrastructure can be used to increase critical mineral production without developing an entirely new mine or processing complex.

For Australia, preserving Port Pirie therefore supports both conventional lead production and the country's wider critical minerals strategy.

Hobart Zinc Smelter Protects Fertilizer and Acid Supply

The Hobart facility has zinc smelting capacity of 280,000 t/yr, making it an important part of Australia's refined zinc supply.

Its industrial role extends beyond zinc because the smelting process also produces sulphuric acid. Impact Fertilizers relies on this local supply to manufacture single super-phosphate at its nearby 170,000 t/yr Hobart plant.

Closure of the smelter would therefore affect both metals and agriculture. Impact would need to import sulphuric acid or import and burn sulphur to replace the local supply.

That risk has become more significant because sulphuric acid prices have surged. Prices in northeast Asia recently reached around $355/t, up 158% from levels before the US-Iran war.

This demonstrates the broader industrial value of smelters. Byproducts such as sulphuric acid can support neighbouring manufacturing operations and create regional industrial ecosystems that are expensive to replace once lost.

However, repeated government support also exposes the underlying competitiveness problem. High energy and operating costs continue to pressure Nyrstar's Australian assets, meaning long-term viability will require more than public funding.

The Metalnomist Commentary

Australia is effectively paying to preserve industrial infrastructure that would be difficult and expensive to rebuild once closed. Port Pirie's antimony potential and Hobart's link to fertilizer production make the two smelters strategically more valuable than their zinc and lead output alone suggests.

Elmet Defense Contract Supports US Molybdenum Manufacturing Expansion

Elmet Technologies

Elmet defense contract funding will support expanded US production of molybdenum and other refractory metal products used in defense applications. The Department of Defense awarded the company $4.3mn to improve production capabilities and increase manufacturing capacity.

Elmet defense contract support is focused particularly on molybdenum products used in modern defense interceptor programs. The investment strengthens a domestic supply chain for materials that must perform under extreme heat, mechanical stress and demanding operating conditions.

Elmet defense contract also reflects broader US efforts to secure strategic processing capacity inside the country. Molybdenum is important not only as an alloying metal, but also in high-performance components where heat resistance and strength are critical.

The company produces pure molybdenum products and molybdenum-based alloys at its Lewiston, Maine, facility, with additional manufacturing operations in Michigan and Ohio.

Molybdenum Capacity Supports Defense Interceptor Programs

Molybdenum is valued for its high melting point, strength at elevated temperatures and resistance to thermal degradation. These properties make it important for aerospace, defense, electronics and other advanced industrial applications.

Interceptor systems require materials capable of maintaining performance under intense thermal and mechanical conditions. That creates demand for tightly controlled refractory metal products rather than standard industrial grades.

Elmet plans to use the new funding to improve existing production capabilities and expand capacity. This could strengthen output of both pure molybdenum products and engineered molybdenum alloys.

The contract also highlights the importance of downstream manufacturing. Securing raw molybdenum alone does not guarantee defense supply security unless domestic producers can convert it into qualified components and material forms.

For the US defense sector, expanding domestic processing reduces reliance on imported finished refractory metal products and gives manufacturers greater control over quality, traceability and production schedules.

Refractory Metals Gain Strategic Supply Chain Importance

Elmet operates three US manufacturing sites in Lewiston, Maine, Coldwater, Michigan, and Euclid, Ohio. That footprint gives the company a broader domestic platform for refractory metal processing.

The latest investment strengthens this network at a time when governments are placing greater emphasis on domestic production of strategic materials used in defense systems.

Refractory metals such as molybdenum are especially sensitive because production volumes are relatively small compared with major industrial metals, while qualification requirements can be high.

This makes manufacturing capacity itself a strategic asset. Even modest disruptions can affect specialized defense programs when alternative qualified suppliers are limited.

The contract therefore carries significance beyond its $4.3mn value. It supports the retention and expansion of technical capability inside the US defense industrial base.

The Metalnomist Commentary

The Elmet award shows that defense supply security depends on qualified processing capacity as much as raw material access. Molybdenum may be a small-volume market, but its role in high-temperature defense systems gives domestic manufacturing outsized strategic value.

Pursuit Aerospace Acquisition Expands Titanium and Inconel Machining Capacity

Leesta Industries

Pursuit Aerospace acquisition of Leesta Industries expands the US aircraft component manufacturer's machining capabilities while strengthening its existing forging operations. The deal also gives Pursuit its first facility in Montreal, one of North America's major aerospace manufacturing hubs.

Pursuit Aerospace acquisition adds Leesta's 38,000ft² facility in Pointe-Claire, Quebec, where the company operates milling, lathe and mill-turn equipment for precision aerospace parts.

Pursuit Aerospace acquisition also expands its exposure to several Pratt & Whitney engine platforms. The combination of forging and machining gives Pursuit greater control over more stages of aerospace component production.

Leesta manufactures engine and landing gear components including bearing housings and actuator assemblies from titanium, stainless steel and Inconel. Financial terms of the transaction were not disclosed.

Titanium and Inconel Machining Strengthens Engine Supply Capability

Leesta's expertise in difficult-to-machine aerospace materials adds strategic value to Pursuit's manufacturing platform. Titanium and nickel-based superalloys require specialised tooling, process control and technical experience.

Titanium combines high strength with relatively low weight and strong corrosion resistance, making it important for aircraft engines, structural parts and landing systems.

Inconel and other nickel-based alloys provide strength and oxidation resistance at high temperatures. These characteristics make them essential for engine components operating under extreme thermal and mechanical loads.

Machining these materials can become a bottleneck even when raw metal is available. Tool wear, heat generation and strict dimensional requirements make aerospace machining significantly more complex than conventional industrial production.

By adding Leesta's capabilities, Pursuit can integrate more machining work with its forging operations and reduce dependence on external subcontractors.

Montreal Acquisition Deepens Pratt & Whitney Supply Chain Position

The Montreal location gives Pursuit access to a dense aerospace manufacturing ecosystem with established engineering talent, suppliers and major aircraft and engine programmes.

Leesta's existing work on Pratt & Whitney platforms strengthens Pursuit's relationship with one of the world's major aircraft engine manufacturers.

This matters because aerospace supply chains rely heavily on qualified suppliers. Once a machining process, component and material route are approved for an engine programme, replacing the supplier can require extensive testing and certification.

The acquisition therefore increases both production capacity and customer relevance. It also positions Pursuit to capture more value from each component by combining forging, machining and finishing capabilities.

For metals suppliers, the transaction reinforces strong demand for qualified titanium and nickel alloy processing. Growth in commercial and defence aerospace requires not only additional raw material, but also sufficient downstream capacity to convert it into flight-ready parts.

The Metalnomist Commentary

Aerospace bottlenecks increasingly sit in qualified machining rather than raw metal availability alone. Pursuit's acquisition strengthens its ability to turn titanium and Inconel into higher-value engine and landing gear components within a major aerospace cluster.

Amazon Corning Fiber Optics Deal Expands US AI Infrastructure Supply

Corning

Amazon Corning fiber optics investment will expand US production of optical fiber, cable and connectivity systems used in data centers. Amazon plans multibillion-dollar investment under a multi-year agreement with Corning.

Amazon Corning fiber optics partnership reflects the rapid infrastructure buildout behind artificial intelligence and cloud computing. Faster data transfer between servers, accelerators and data centers is increasing demand for high-performance optical networks.

Amazon Corning fiber optics expansion also has a direct critical minerals angle. Fiber optics are the largest end-use market for germanium in the US, linking AI infrastructure growth with demand for a strategically important minor metal.

Corning expects the partnership to create about 1,000 advanced manufacturing jobs in North Carolina. The companies also plan to expand technician training to support the larger manufacturing base.

AI Data Centers Drive Optical Fiber Capacity Growth

Amazon will use Corning's optical fiber, cable and connectivity products across its data center network. The agreement gives Corning a major anchor customer as it expands domestic manufacturing.

AI computing requires enormous volumes of data to move quickly between processors, memory and networking systems. As computing clusters grow larger, optical connectivity becomes increasingly important for maintaining high bandwidth and low latency.

This means AI investment is spreading beyond semiconductor chips into photonics, fiber networks, power equipment, cooling systems and grid infrastructure.

Corning expects to increase fiber production by more than 50%. It also plans three new manufacturing facilities in North Carolina and Texas through a separate partnership with Nvidia.

The combination of Amazon and Nvidia demand gives Corning greater visibility for future capacity utilization. It also supports additional investment in US optical communications manufacturing.

Germanium Demand Gains New AI Infrastructure Exposure

The expansion is important for germanium because the metal is widely used in fiber optic manufacturing. Germanium compounds help control the refractive properties of optical glass, supporting efficient transmission of high-speed data.

Rapid fiber deployment therefore creates another demand channel for the minor metal. Individual fiber products use relatively small quantities, but large-scale data center construction can materially increase aggregate consumption.

Supply security is becoming more important because germanium production and processing remain concentrated. Greater AI-related demand could increase competition for refined and high-purity material.

For technology companies, optical connectivity is becoming as critical as access to processors and electricity. For materials suppliers, that means AI demand increasingly reaches deep into specialty metals and advanced materials supply chains.

Corning's expansion shows how data center investment can translate into new demand for physical infrastructure and strategic raw materials far beyond the semiconductor sector.

The Metalnomist Commentary

AI infrastructure is becoming a broad materials story, not just a chip story. As hyperscale data centers expand, germanium and optical fiber capacity could become increasingly strategic bottlenecks.

Nyrstar Smelter Funding Secures Australian Zinc, Lead and Antimony Supply

Nyrstar

Nyrstar smelter funding will receive another A$105mn from Australia's federal and state governments to keep the company's Port Pirie lead and Hobart zinc operations running through at least the end of 2026.

Nyrstar smelter funding is strategically important because the two facilities support several interconnected supply chains. Port Pirie produces lead and antimony, while Hobart supplies zinc and sulphuric acid used by Tasmania's fertilizer industry.

Nyrstar smelter funding also reflects growing government concern over the loss of domestic metals processing capacity. Trafigura-owned Nyrstar had warned that both plants could face closure or curtailment without additional financial support.

The new package follows an earlier A$135mn rescue programme and comes after Trafigura recorded a $241mn impairment against the two Australian smelters.

Port Pirie Could Expand Antimony Output to 5,000 t/yr

Port Pirie has lead smelting capacity of 160,000 t/yr and produces antimony as a byproduct. The new government package will fund continued operations as well as pre-feasibility and feasibility studies for further expansion.

Nyrstar expects antimony output to reach 2,000 t/yr by the end of 2026. Production could rise to 5,000 t/yr by 2028 if the expansion proceeds.

That gives Port Pirie growing strategic importance. Antimony is used in defence, flame retardants, lead alloys, batteries and other industrial applications, while global processing capacity remains concentrated.

Nyrstar shipped 1t of antimony from Port Pirie to an Australian manufacturer in February under commitments linked to the earlier rescue package.

The planned expansion illustrates how existing metallurgical infrastructure can be repurposed to increase critical mineral production without developing an entirely new mine or processing complex.

For Australia, preserving Port Pirie therefore supports both traditional lead production and the country's broader critical minerals strategy.

Hobart Zinc Smelter Supports Fertilizer and Industrial Supply

The Hobart facility has zinc smelting capacity of 280,000 t/yr, making it an important part of Australia's refined zinc supply.

Its role extends beyond zinc because the smelting process also produces sulphuric acid. Impact Fertilizers relies on this local supply to manufacture single super-phosphate at its nearby 170,000 t/yr Hobart plant.

Closure of the smelter would therefore affect both metals and agriculture. The fertilizer producer would need to import sulphuric acid or bring in sulphur and establish alternative processing arrangements.

This demonstrates the broader industrial value of smelters. Byproducts such as sulphuric acid can support neighboring manufacturing operations and create regional industrial ecosystems that are difficult to replace once lost.

However, the repeated need for public funding highlights the underlying competitiveness problem. High energy and operating costs continue to pressure Nyrstar's Australian assets.

Government support can preserve strategic capacity in the short term, but the longer-term solution will require lower operating costs, improved efficiency and stronger economics for zinc, lead and byproduct production.

The Metalnomist Commentary

Australia is effectively paying to preserve industrial capability that would be costly to rebuild once closed. The strongest strategic case lies in Port Pirie's antimony potential and Hobart's link to fertilizer production, but long-term viability still requires a sustainable cost structure.

Elmet Defense Contract Expands US Molybdenum Manufacturing Capacity

Elmet Technologies

Elmet defense contract funding will support expanded US production of molybdenum and other refractory metal products used in defense applications. The Department of Defense awarded the company $4.3mn to improve production capabilities and increase manufacturing capacity.

Elmet defense contract support is focused particularly on molybdenum products used in modern defense interceptor programs. The investment strengthens a domestic supply chain for materials that must perform under extreme heat, mechanical stress and demanding operating conditions.

Elmet defense contract also reflects broader US efforts to secure strategic materials and processing capacity inside the country. Molybdenum is important not only as an alloying metal but also in high-performance components where heat resistance and strength are critical.

The company produces pure molybdenum products and molybdenum-based alloys at its Lewiston, Maine, facility, with additional manufacturing operations in Michigan and Ohio.

Molybdenum Capacity Supports Defense Interceptor Programs

Molybdenum is valued for its high melting point, strength at elevated temperatures and resistance to thermal degradation. These properties make it important for aerospace, defense, electronics and other advanced industrial applications.

Interceptor systems require materials capable of maintaining performance under intense thermal and mechanical conditions. That creates demand for tightly controlled refractory metal products rather than standard industrial grades.

Elmet plans to use the new funding to improve existing production capabilities and expand capacity. This could strengthen output of both pure molybdenum products and engineered molybdenum alloys.

The contract also highlights the importance of downstream manufacturing. Securing raw molybdenum alone does not guarantee defense supply security unless domestic producers can convert it into qualified components and material forms.

For the US defense sector, expanding domestic processing reduces reliance on imported finished refractory metal products and creates more control over quality, traceability and production schedules.

Refractory Metals Gain Strategic Supply Chain Importance

Elmet operates three US manufacturing sites in Lewiston, Maine, Coldwater, Michigan, and Euclid, Ohio. That footprint gives the company a broader domestic platform for refractory metal processing.

The latest investment strengthens this network at a time when governments are placing greater emphasis on domestic production of strategic materials used in defense systems.

Refractory metals such as molybdenum are particularly sensitive because production volumes are relatively small compared with major industrial metals, while qualification requirements can be high.

This makes manufacturing capacity itself a strategic asset. Even modest disruptions can affect specialized defense programs when alternative qualified suppliers are limited.

The contract therefore carries significance beyond its $4.3mn value. It supports the retention and expansion of technical capability inside the US defense industrial base.

The Metalnomist Commentary

The Elmet award shows that defense supply security depends on qualified processing capacity as much as raw material access. Molybdenum may be a small-volume market, but its role in high-temperature defense systems gives domestic manufacturing outsized strategic value.

Amazon Corning Fiber Optics Deal Expands US Data Center Supply Chain

Corning

Amazon Corning fiber optics investment will expand US manufacturing capacity for optical fiber, cable and connectivity systems used in hyperscale data centers. Amazon plans multibillion-dollar investment under a multi-year supply agreement with Corning.

Amazon Corning fiber optics partnership reflects the growing infrastructure requirements behind artificial intelligence and cloud computing. Higher computing density requires faster data transmission between servers, accelerators and data centers, making optical connectivity an increasingly strategic component.

Amazon Corning fiber optics expansion also has implications for specialty metals. Fiber optics are the largest end-use market for germanium in the US, linking rapid data center construction with demand for a highly concentrated critical mineral.

The partnership will also create around 1,000 advanced manufacturing jobs in North Carolina and expand training for fiber optic technicians.

AI Data Centers Drive Optical Fiber Capacity Expansion

Amazon will use Corning's optical fiber, cable and connectivity products across its data center network. The agreement gives Corning a large anchor customer as it expands domestic production.

Data center growth is changing the materials required for digital infrastructure. AI systems need enormous computing capacity, but processors are useful only if data can move between them quickly enough.

Optical fiber addresses that bottleneck by supporting high-speed, high-bandwidth transmission over distances where conventional electrical connections become less efficient.

This means AI investment is increasingly spreading beyond semiconductor chips into photonics, optical networking, power equipment, cooling systems and grid infrastructure.

Corning expects to increase fiber production by more than 50%. The company is also planning three new manufacturing facilities in North Carolina and Texas through its partnership with Nvidia.

The combination of Amazon and Nvidia demand gives Corning strong visibility for future capacity utilisation. It also strengthens the case for further US investment in optical connectivity manufacturing.

Germanium Becomes More Exposed to Data Center Growth

The expansion carries a direct critical minerals angle because germanium is widely used in optical fiber production. The US fiber optics industry is already the country's largest end-user of the metal.

Germanium is used to modify the refractive properties of glass in fiber optic systems, making it an important material for high-performance communications infrastructure.

That creates a new demand link between AI investment and minor metals. Rapid data center expansion can increase germanium consumption even though only relatively small quantities are used in individual fiber products.

Supply security therefore matters. Germanium production and processing remain geographically concentrated, making diversified sourcing increasingly important as optical infrastructure expands.

For Amazon and other hyperscale data center operators, secure connectivity supply will become as important as access to processors and power. For Corning, the opportunity lies in combining domestic manufacturing scale with long-term demand from major technology customers.

The wider industrial message is clear. AI infrastructure is creating new demand not only for copper and semiconductors, but also for specialty materials embedded deeper inside optical communications systems.

The Metalnomist Commentary

Amazon's investment shows that the AI infrastructure race is moving into optical connectivity and its upstream materials. Germanium could become one of the quieter beneficiaries as data centers require increasingly dense, high-speed fiber networks.

SMEL Ferro-Alloy Sales Fall as Export Costs and Ore Prices Rise

Shyam Metalics

SMEL ferro-alloy sales declined sharply in May as higher ore prices, Middle East-related logistics costs and weak overseas demand weighed on shipments. Shyam Metalics and Energy sold 16,201t of ferro-alloys during the month, down 18% from a year earlier.

SMEL ferro-alloy sales were also lower than April’s 18,391t, showing that export pressure is affecting near-term momentum. The company said higher raw material costs and more expensive manganese alloy exports contributed to the decline.

SMEL ferro-alloy sales weakness contrasts with more resilient stainless steel demand. This divergence highlights the growing importance of downstream and value-added products in protecting margins when bulk alloy markets weaken.

The company is responding by investing heavily in special bar quality steel, specialty wire rod and downstream stainless steel capacity through projects scheduled for completion by 2029.

Ferro-Alloy Exports Face Cost and Demand Pressure

SMEL’s May ferro-alloy sales fell from 19,869t a year earlier to 16,201t. The decline reflects pressure from both input costs and weaker export economics.

Ore prices have risen sharply, increasing production costs for manganese-based alloys. At the same time, the Middle East conflict has raised freight and export costs, making Indian material less competitive in some overseas markets.

Weak international demand has compounded the problem. Ferro-alloy producers depend heavily on steelmaking activity, so softer orders quickly translate into lower shipments and weaker utilisation.

This is particularly important for manganese alloys, where energy, ore and freight costs all account for a significant share of delivered pricing.

The market environment therefore favours producers with captive raw materials, lower-cost power and stronger domestic customer bases.

Value-Added Steel Becomes More Important to SMEL’s Strategy

SMEL’s stainless steel sales performed better than ferro-alloys, rising by 5.3% year on year to 7,367t in May. However, sales were around 7% lower than April.

Aluminium showed greater weakness, with sales falling by 25% year on year to 1,570t. Volumes were also 17% lower than the previous month.

The mixed performance reinforces SMEL’s decision to increase exposure to higher-margin products. The company is investing another Rs27bn to expand special bar quality and specialty wire rod capacity.

It is also expanding its downstream stainless steel complex, aiming to increase the share of higher-value products in its portfolio.

These projects should reduce dependence on lower-margin commodity sales and give SMEL greater exposure to automotive, engineering and industrial customers.

The strategy is important because bulk ferro-alloy markets can be highly cyclical. Producers with more downstream processing capacity can capture additional value and better manage weak export conditions.

The Metalnomist Commentary

SMEL’s May results show why Indian metals producers are moving downstream. Higher ore, freight and energy costs are compressing bulk alloy margins, making value-added steel products increasingly important for earnings stability.

Texas LFP Plant Links Domestic Lithium Supply With Cathode Production

EnergyX

Texas LFP plant development is moving forward after Wildcat Discovery Technologies and EnergyX formed a joint venture to produce lithium iron phosphate cathode active material in Hooks. The project represents more than $230mn of investment and is designed for around 15,000 t/yr of CAM capacity.

Texas LFP plant plans are strategically important because the facility will sit next to EnergyX’s Lonestar lithium project in the Smackover formation. This creates a potential domestic route from lithium extraction and conversion to cathode material production.

Texas LFP plant supply will also benefit from a structured lithium pricing agreement. EnergyX will provide lithium carbonate to the joint venture at commercially favourable terms, including a market discount and price floor and ceiling intended to reduce exposure to lithium price volatility.

The project strengthens US efforts to localise more of the battery value chain, particularly for LFP chemistry used in electric vehicles and stationary energy storage.

Co-Location Reduces Battery Supply Chain Risk

The Hooks facility is designed to produce about 15,000 t/yr of LFP cathode active material, with potential for future expansion.

Its location beside EnergyX’s Lonestar lithium operation is the project’s main industrial advantage. Co-locating lithium supply and cathode production can reduce logistics complexity, shorten supply chains and improve feedstock security.

EnergyX plans to produce 48,500 t/yr of lithium hydroxide at Lonestar by 2030. The first phase is expected to reach 14,250 t/yr by 2028.

The project is targeting operating expenditure of about $3.85/kg, which could strengthen the economics of downstream battery material production if that cost structure is achieved at scale.

The joint venture will initially receive lithium carbonate under a pricing structure that limits exposure to extreme market movements. This gives the cathode operation greater cost visibility during periods of lithium volatility.

For battery materials projects, this kind of feedstock agreement can be as important as plant capacity. Cathode producers need reliable supply, predictable chemistry and manageable pricing to compete with established Asian producers.

LFP Growth Supports US Battery Localization

LFP chemistry is gaining market share because it offers lower cost, strong cycle life and improved thermal stability compared with nickel-rich cathode systems.

It also avoids nickel and cobalt, reducing exposure to two globally concentrated and price-sensitive battery metals. However, LFP still depends heavily on lithium supply and specialised cathode manufacturing capability.

The Wildcat-EnergyX project therefore addresses two major US supply-chain gaps at the same time: domestic lithium production and domestic cathode active material manufacturing.

Stationary energy storage is likely to be an important demand source. Large grid batteries increasingly favour LFP because of its durability, safety characteristics and lower material cost.

EV demand could provide another growth route, particularly as automakers expand lower-cost vehicle platforms using LFP cells.

The project also illustrates a wider shift in US battery strategy. Rather than building isolated mines or chemical plants, developers are increasingly trying to connect extraction, conversion and active material production within regional industrial clusters.

The Metalnomist Commentary

The Wildcat-EnergyX venture is strategically stronger because it links lithium supply directly with LFP cathode production. US battery localization will depend less on individual plants and more on integrated regional chains that control feedstock, processing and pricing risk.

Vital Materials InP Wafer Project Targets China’s Compound Semiconductor Growth

Vital Materials

Vital Materials InP wafer project plans will add new indium phosphide and gallium arsenide materials capacity in Hubei province as China expands its compound semiconductor supply chain. The project will be developed in Jingzhou by subsidiary Hubei Vital New Material.

Vital Materials InP wafer project capacity is planned at 90 t/yr of indium phosphide and 160 t/yr of gallium arsenide wafer materials. The company started an environmental impact assessment on 28 May, although a commissioning schedule has not been disclosed.

Vital Materials InP wafer project development reflects rising demand for high-speed optical components used in artificial intelligence infrastructure, data centres and communications networks. InP is becoming increasingly strategic as optical bandwidth requirements rise.

The investment also deepens China’s downstream use of indium, where the country already dominates global production of both primary and recycled material.

AI and Optical Networks Drive InP Capacity Expansion

Indium phosphide wafers are critical substrates for high-speed optical and photonic devices. They are widely used in lasers, detectors and optical modules that move data between servers and networking systems.

AI data centres are becoming one of the strongest growth drivers for these applications. As computing clusters expand, optical connectivity is increasingly needed to move information at higher speeds and lower latency.

This is supporting a wider global race to expand InP capacity. Chinese producer Yunnan Germanium is increasing production of high-quality InP single-crystal wafers, while overseas manufacturers are also investing in new capacity.

Gallium arsenide remains another important compound semiconductor material. It is widely used in radio-frequency, wireless, sensing and optoelectronic applications where conventional silicon has performance limitations.

Vital’s planned combination of InP and GaAs therefore gives it exposure to multiple growth markets, including AI infrastructure, optical communications, telecommunications and advanced electronics.

The project also fits China’s broader strategy of building more domestic semiconductor materials capacity and reducing dependence on foreign processing technologies.

Export Controls Raise Strategic Value of Indium Processing

China added InP to its dual-use export control system in February 2025, increasing the material’s strategic importance.

Export controls can affect international supply availability even when domestic production is sufficient. This makes local wafer and substrate capacity more valuable to Chinese downstream manufacturers.

China produced an estimated 1,800-1,900t of primary and recycled indium in 2025, giving it a strong upstream resource position. Expanding InP wafer capacity allows more of that indium to move into higher-value semiconductor applications.

That downstream shift matters economically. Selling processed wafers and engineered materials captures more value than exporting refined minor metals alone.

For the global market, the project also reinforces concentration risk. China already holds a dominant position in several minor metals and is now expanding further into downstream semiconductor materials.

The key issue will be whether non-China InP capacity can grow quickly enough to keep pace with AI-driven demand and mitigate supply risks linked to export controls.

The Metalnomist Commentary

Vital’s project shows that the indium supply chain is moving rapidly from metal production toward strategic wafer materials. AI demand is making InP capacity as important as upstream indium availability itself.