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The Pentagon has taken a $150mn stake in a Louisiana-based gallium company as Washington tries to shore up supplies of materials essential to defence manufacturers and to counter Chinese dominance of supply chains.
Atlantic Alumina Co said on Monday the Pentagon’s investment would be followed by more government funding within 30 days of the preferred equity purchase closing. Commodities investment firm Pinnacle will also invest $300mn in Atalco.
The US’s major defence contractors have been concerned about sourcing gallium, which is critical for systems including radars, missile seekers, satellites and radio systems.
Washington has accelerated efforts to bolster its supply of critical materials, with the Trump administration planning to pump billions of dollars into such investments. The Pentagon did not immediately respond to a request for comment about the latest deal.
Gallium, a trace element in multiple minerals and ores, is a byproduct of alumina production, which is not produced in the US. It is among the critical metals subject to Chinese export controls, underscoring Beijing’s dominance over supply chains crucial to industries including technology and defence.
China accounted for about 99 per cent of refined gallium supply in 2025, as well as about 70 per cent of global demand, according to market intelligence group Project Blue.
Atalco said it expected to eventually produce more than 1mn tonnes of alumina and 50 tonnes of gallium annually in Louisiana, and become “capable of meeting the total gallium demand signal of the US”, but it did not specify a timeline.
In November, the Pentagon awarded $40mn to ElementUSA Minerals to separate and purify gallium from industrial waste. The US government in December also backed a $7.4bn investment in an antimony, germanium and gallium processing plant to be built by Korean company Korea Zinc.
The Trump administration has pushed to take equity stakes in companies on national security grounds. In July, the Pentagon took a $400mn stake in rare earths producer MP Materials, and the following month the US government took a 10 per cent stake in Intel and struck a so-called golden share deal with US Steel Corp.
The US imported about 7 tonnes of wrought and unwrought gallium from China in 2019, but that dropped to zero by 2024, according to trade data compiled by Silverado Policy Accelerator. The US imported 11 tonnes of gallium metal overall in 2024, according to the US Geological Survey.
Mounting anxiety about supply chain vulnerability and the increase in prices of niche metals, thanks to Chinese curbs on exports last year, have prompted a push by western policymakers and companies to build alternative sources of critical minerals.
Several western miners have outlined plans to begin producing gallium, including Alcoa, Metlen Energy & Metals and Rio Tinto with partner Indium Corporation.
Price reporting agency Fastmarkets has estimated that about 150-200 tonnes of annual gallium production will come online over the next few years, much more than the drop in Chinese exports, although demand for the metal is expected to rise.
One risk for western producers is that China could relax its export controls and flood the market, pushing down prices and hitting other producers. Companies have sought pricing guarantees and other mechanisms to de-risk investments.
Trump’s One Big Beautiful Bill Act contains $7.5bn for critical minerals, including $2bn to bolster the national defence stockpile, which the Pentagon intends to spend by late 2026 or early 2027.
The OBBA also includes $5bn for defence department investments in critical minerals supply chains and $500mn for a Pentagon credit programme to spur investments.
