The latest of the Yellow Perils is that China is restricting the export of gallium and germanium.
The Chinese today produce 98pc of the world supply of primary gallium. The figure falls to 80pc for purified gallium used in industry, but you cannot reach that stage without access to the raw material. This is the metal that China has chosen to target along with its sister germanium, 31 and 32 respectively on Mendeleev’s periodic table. It won’t be the last.
Many are getting very worried over this. No one should be very worried over this.
One set of reasons is technical. The raw materials to produce the two are, respectively, Bayer Process residues and fly ash from coal burning. Here’s a list of those plants that extract alumina from bauxite, that Bayer process. Stick the right doohickey on the side of any of those plants - very few currently have one - and get gallium. Very, very few think that there’s a shortage of fly ash in the world. Both can also be extracted as byproducts from certain zinc ores.
There is simply no shortage at all of the base materials. All that’s ever needed is the willingness to actually process them out of extant resources. So, not a large problem then. China’s the major supplier because it’s willing to do it cheaper than others and when that’s not true then China won’t be the major supplier.
We can prove this from experience. Back in 2010 China tried something similar with the rare earths. As one of us predicted - to predict these things, in print, is more impressive we feel than simply historical pointing - that this would not be a problem. Four years later it was agreed that we had made the right prediction.
It’s also possible to appeal to another set of reasoning, away from the technical details of these markets. Which is that if anyone tries to exploit a contestable monopoly then the monopoly will be contested. The only way you can keep a monopoly position that could be contested is by not exploiting it for reasons of profit or power. That is, if you have a monopoly over the production of something just because you do it well, or cheaply, or subsidise it, then the moment you raise your price to profit from your control then everyone else is going to roll up sleeves and go back to doing it themselves. Slightly more expensively than when you were doing it, true, but less expensively than your attempt to exploit.
Which is indeed what happened with rare earths. And will also happen with gallium and germanium. And, as we insist, every other contestable monopoly. It’s the very attempt to capitalise upon that monopoly position that motivates everyone to break it. And precisely because it is contestable the contestation will work.
It is true that Gerry Wise is no longer with us to guide the germanium factory (Gerry being perhaps the tail end of that Finchley area metals industry described by Oliver Sachs in “Uncle Tungsten”) but as it happens one of us has the plans for a germanium extraction plant on a desk somewhere - fly ash from a lignite plant to produce perhaps 4 tonnes a year (say, 2% of global demand. About). If anyone’s unconvinced by the explanation above about why not to worry they can just send a blank - but signed please - cheque and we’ll get on with it.
Or perhaps more sensibly, leave those who know what they’re doing to contest that monopoly that China is trying to exploit. As we insist, it will be successfully contested.