The long-term impacts of these restrictions are not immediately clear.
China’s export controls on some gallium and germanium products that it announced last month have come into effect Tuesday. Exporters of these products are now required to apply for licenses to transport them abroad. However, they can only start submitting their applications from this date, Reuters reports citing traders of these critical raw materials. The process of obtaining these licenses typically takes about two months, the news agency added.
China controls most of the global production of these two raw materials, accounting for roughly 90 percent of the world’s gallium and around 70 percent of the world’s germanium production. According to Nikkei Asia, prices of gallium and germanium related products surged accordingly ahead of the due date. Industry members are stockpiling the materials to continue production in case the restrictions should have lasting impacts on supply chains.
Besides industries, the military also depends on germanium and gallium as they also have some military applications, for example in lasers and missile guidance systems. Hence, the U.S. Department of Defense is tapping domestic and Canadian mining companies to possibly contract them.
On the other side of the pond, European policymakers are also trying to ramp up domestic production to offset the Chinese restrictions. France, for example, advocates for efforts of the European Union to reach self-sufficiency.