In the race to build a new generation of electric vehicles, the demand for certain rare earth minerals has skyrocketed.
Two critical rare earth minerals are Germanium and Gallium, and China is the largest supplier of these minerals. We covered the industrial applications of these minerals in a recent Global Investment Daily article.
In a report from the BBC, China has now enacted export curbs on Germanium and Gallium in response to Washington and the Netherland’s policy of restricting Chinese access to advanced microprocessor technologies.
As expected, spot prices for Germanium and Gallium have risen sharply. According to Nikkei Asia, the price of gallium is up 18 percent since the end of June, reaching $332.50 per kilogram in US and European markets, while germanium has increased more modestly, up 4 percent this month to about $1,390 per kilogram. (Source: The Register)
Mining stocks have also risen sharply. Ivanhoe Mines (IVPAF), a major Germanium mining company, has seen their stock rise from $7.31 to a high of $10.63 since June.
Ivanhoe Mines Daily Chart (TradingView)
The face-to-face chip showdown between Western nations in China appears obvious. China’s stance is essentially, ‘If you don’t give us the chips we want, we won’t supply the raw materials you need to make them.’
Stay tuned to Global Investment Daily for further developments in this sector.