In the 1980s and 1990s, the Pinjarra Gallium Plant in Western Australia emerged as a pioneering attempt to secure large-scale production of a critical mineral. At its peak, it could produce more gallium than today’s non-Chinese sources, by an order of magnitude. Although it promised enormous benefits, including a planned rare earths facility, the project encountered multiple obstacles: environmental permitting issues, extreme price volatility, and a lack of integrated midstream capabilities. These factors contributed to its eventual collapse, which occurred surprisingly quickly.
Why does this matter now? Today’s policy debates on critical minerals—such as gallium and rare earths—mirror the same commercial, regulatory, and geopolitical challenges. Today, China dominates production of these critical minerals, and recently introduced export bans have created panic in the West. Would we be in this current situation if projects such as these received appropriate support to prevent their failure? How can we take learnings from this to prevent failure of future critical minerals projects?
This example highlights the importance of addressing market fluctuations and environmental approvals, while emphasising the need for long-term policy support. It poses an important question: can governments and industry partners learn from policy shortfalls to secure resilient critical mineral supply chains for the future?
Pinjarra Gallium Refinery: A Historical Overview
Background and ambitions of this significant critical minerals project
The French chemical company Rhône-Poulenc established the AU$50 million the Pinjarra Gallium Plant in Western Australia in 1989, aiming to produce up to 50 tonnes per annum (tpa) of gallium—building off experience running its smaller 5 tpa facility in Salindres in France (gallium is primarily extracted as a byproduct of alumina refining, and the significantly greater bauxite throughput of the Alcoa Pinjarra alumina refining operation represented a much greater potential gallium feedstock than the much smaller 1970’s built Salindres refinery). At the time, this new plant represented a dramatic shift in global gallium production (50 tpa amounted to approximately 20–30% of global demand at that time).
Alongside this gallium plant, Rhône-Poulenc also intended to build a rare earths processing facility on the same site, leveraging monazite feedstock to produce around 15,000 tpa of solid rare earth nitrate concentrate. Had this AU$150 million investment into phase two gone ahead, it would have placed Western Australia among the top global producers of rare earth materials.
Canberra Times announced the investment into the new gallium and rare earths refinery (January 16, 1987)
Importance of Gallium and Rare Earths
Gallium is vital for many modern technologies, including semiconductors, solar cells, and advanced defence systems. Rare earths are similarly crucial, finding applications in magnets, electronics, and specialised alloys. As with most critical minerals, China currently dominates these supply chains. However, back in the late 1980s, China was not yet dominant—and by situating a major gallium and rare earths plant in Australia, Rhône-Poulenc hoped to address growing market needs well before the present-day emphasis on critical mineral independence.
Challenges and Collapse
Despite the plant’s significant potential, several interrelated issues emerged:
- Environmental Approvals: The proposed rare earths facility, costing an estimated $150 million, faced delays and permit challenges, resulting in an incomplete vision of a fully integrated site. Specifically, the company ran into opposition from the WA Environmental Protection Authority, which was concerned with plans for the long-term storage of waste material, some of which would be radioactive (a big political issue in the late 1980s). Without the rare earths component, the overall economics of the Pinjarra project weakened.
- Market Volatility: The sudden increase in gallium supply from Pinjarra coincided with: (i) a capacity ramp-up from China; (ii) additional gallium released from discontinued neutrino detector projects in Europe and Russia further depressed prices; and (iii) increased supply from this facility. Market prices dropped 20-30% the day the plant reopened (spot price dropped from $500-600 to $300). These narrowed the plant’s margins to unsustainable levels.
- Insufficient Midstream Capabilities and Pools of Cost: Australia lacked a local high-purity gallium purification facility, meaning gallium concentrates had to be shipped to France for purification before being sent to Japanese buyers. It took six months for the final product to reach off-take customers in Japan. At the time, there was only a single laboratory, based in Canada, capable of analysing the metal purity to the necessary level of precision—creating additional months of delays. This convoluted route—Australia → France → Japan (via testing in Canada)—raised production costs and slowed responsiveness to market shifts.
4. Over-capitalisation: The project was reportedly built for around AU$50 million, but the absence of the rare earth’s facility meant the plant had a bigger footprint than necessary, with lower returns. The plant entered care and maintenance status as early as 1990–1991, and a short-lived restart in 1996-1997 (with a leaner operation and team), did not reverse its fortunes.
5. Supply chain complexity and technological developments
This plant was operating before just-in-time supply chains. Bayer liquor was taken from the adjacent Alcoa alumina refinery. Operating costs were highly correlated to chemicals and reagent usage. Hydrochloric acid was very difficult and expensive to procure in Western Australia at the time, so novel extraction processes were developed using sulphuric acid instead (this is quite different from the processing methods used today). The solvents and chemicals were predominantly procured from Europe, adding to procurement complexity and cost.
In subsequent decades, the Pinjarra site changed hands. GEO Specialty Chemicals purchased it in around 2000 and announced a possible AU$30 million investment in production upgrades. However, this never materialised, underlining the continued instability of gallium markets and the complexities of critical mineral projects more broadly.
An overlay of the site plan for the gallium plant and rare earths refinery (submitted to the Western Austrian EPA), over a Google Maps view of the facility today.
Lessons for Today’s Critical Minerals Landscape
1. Long-Term Policy Support for Critical Minerals:
Pinjarra’s struggles demonstrate that critical mineral ventures require consistency and clarity in regulation, particularly regarding environmental approvals. Could longer-term, multi-partisan support have provided the project more time to mature? Governments in Australia, the United Kingdom, the United States, and Europe are now initiating measures—e.g. the U.S. CHIPS Act, Europe’s Critical Raw Materials Act, IRA and the new “Unleashing Energy” executive order—partly to ensure that firms do not face abrupt regulatory hurdles. But do these types of policies effectively address the economic fundamentals of building capacity in these minor metal markets?
2. Risk Mitigation Through Strategic Collaboration:
Prices of niche critical minerals, traded in tiny market volumes (like gallium) can shift rapidly, and be heavily impacted through mechanisms such as stockpiling. This presents significant challenges for ventures that spend significant capital, and demand significant working capital, to continue operating. One lesson from Pinjarra Gallium is the need for long-term offtake agreements, pricing frameworks, or public-private partnerships that stabilise income (possibly >10 year). If such mechanisms had been in place, the plant might have weathered the gallium price collapse more effectively. Bernard Dahdah, from Natixis, articulated it well “..to restart those operations, consuming companies will need to commit to long-term offtakes at prices that would incentivise local production…The monetary value of the gallium and germanium contained in those high-end electronics is extremely small compared with the final product’s end value”. But it is worth noting that the reality of this is difficult due to the complexity of the value chains of these minor metals that end up in advanced technology supply chains.
3. Integrated Value Chains:
The Western Australian example highlights the financial and logistical strain of shipping concentrates halfway around the world for refining. Major producing nations like China mitigate these issues by vertically integrating mining, refining, and advanced component manufacturing within a single region. Western governments and industries might consider whether the formation of specialised “critical mineral clusters” could deliver the economies of scale and access to a downstream eco-system that Pinjarra lacked.
4. Collaboration Between Upstream Mineral-Rich and Downstream Dominant Ecosystems:
In Pinjarra’s era, Australia possessed abundant raw materials but limited midstream and downstream infrastructure. Meanwhile, Europe and Japan have skills and experience, advanced recovery technology and downstream markets. Stronger cooperation between mineral-rich countries and regions that have the midstream and downstream ecosystems could help future ventures avoid similarly fragmented supply chains.
5. Importance of Demand Certainty:
The Pinjarra facility’s profitability depended heavily on stable gallium demand, especially from advanced tech users. Defence and semiconductor industries now hold considerable sway in shaping these markets, and their involvement in policy design could help drive sustained demand. Programmes similar to the U.S. Defense Production Act reflect a willingness to invest at scale in critical resources. Without such guarantees, producers remain vulnerable to sudden market downturns.
6. Procurement and Cost Stability:
For these specialised and niche production processes, procurement can be complex and cost inputs can fluctuate significantly. This leaves producers highly sensitive to small economic or political changes. Governments must provide companies with long-term certainty around policy and reasonable protections against adversarial state manoeuvres, to help stabilise revenue, cost and prevent upstream supply chain shocks.
7. Innovation:
It is important to highlight that if this refinery were hypothetically in operation today with the legacy flow sheet, it would likely sit at the upper end of the cost-curve. This is because the capacity built since then elsewhere in the world i.e. in China, operates under improved and more integrated ion-exchange flow sheets with high performing resins that allow for much better cost performance. The lesson here is that innovation needs to remain at the core of these industrial processes and the support and investment appetite needs to be there to implement those innovations.
Conclusion
The Pinjarra Gallium Plant once commanded global attention as a bold initiative to supply and secure high-value materials for advanced technologies. Its decline illustrates how fluctuating prices, incomplete infrastructure, and uncertain policy support can undermine even the most promising critical mineral projects. Could the West, if better prepared, have avoided the dominance of Chinese supply chains for gallium and rare earths?
Pinjarra’s experience should serve as a reminder that policymakers and industry leaders from both the upstream and downstream need to work together, across countries that span the entire value chain, towards long term strategic goals. As nations seek to expand their sources of gallium and rare earths, they must not overlook the factors that contributed to this project’s collapse. If decision-makers learn from history and plan for economic, regulatory, and geopolitical risks over the long term, future endeavours may secure robust supplies of strategic resources. Will these lessons finally be heeded, or will valuable projects continue to falter under the same pressures?
In viewing the plant’s brief but instructive operation, one can see how today’s critical minerals push could benefit from foresight, collaboration, and clear, enduring policy commitments. Pinjarra stands as both a cautionary tale and an example of the potential gains that remain within reach when resource-rich regions align closely with technological expertise and forward-thinking governance.
References and Acknowledgements
Our research was conducted through expert interviews with staff involved in the project in both the design, operation, and leadership over its journey. Many thanks for taking the time to speak to us.
Also see:
https://www.afr.com/companies/gallium-plant-to-open-19890303-kaks0
https://www.epa.wa.gov.au/sites/default/files/EPA_Report/774_B810.pdf
https://www.epa.wa.gov.au/sites/default/files/EPA_Report/B481.pdf
https://www.afr.com/politics/gallium-plant-may-close-19900427-k3vh0
