China’s dominance in low-purity gallium production, controlling approximately 99% of the market, has led to significant export restrictions since 2023, driving prices up by 141% to around $2,269 per kilogram. This surge is exacerbated by Middle East conflicts disrupting aluminum production, a primary source of gallium. As companies and governments seek alternative sources, two mining stocks—Alcoa (AA) and Teck Resources (TECK)—are positioned to benefit from this trend.
Alcoa is leveraging its vertically integrated supply chain and government support to enhance gallium recovery, aiming for 100 million tons annually from its Wagerup refinery. Despite a recent revenue dip, its earnings per share doubled, driven by rising aluminum prices. Meanwhile, Teck is focusing on gallium processing infrastructure, minimizing mining risks while capitalizing on the North American semiconductor supply chain. Both companies have experienced over 70% stock price increases in the past year, reflecting their strong financial health and strategic positioning.
Investors should consider Alcoa and Teck as viable options in the current market landscape, where the demand for critical minerals continues to rise amid geopolitical tensions and supply chain shifts.
Source: fool.com