As I’ve written before, Rare Strategic Metals (RSMs) are vital to emerging technologies, green energy and high-end medical equipment. National Geographic has even described them as “the secret ingredient in almost everything.”
While there are several Rare Strategic Metals, the elements gallium and indium have recently received significant attention from all quarters. This includes governments and industries in the United States, and EU, and now among theoretical and practical mathematicians, as well.
In fact, applied science researchers recently published a report in the journal, Science Advances, demonstrating industries and producers needing gallium or indium are in danger of facing severe shortages, along with higher prices. The researchers call this ‘Trade Risk.’ They have made the case that their research revealed ‘trade risks’ associated with indium in the EU and gallium in the United States pose the second highest risk to buyers in their respective markets.
Lead author of the report, Peter Klimek, a researcher at the Medical University of Vienna, Austria, collaborated with the International Institute for Applied Systems Analysis and concluded:
“Regional shortages of [these minerals]… could ripple throughout the trade system, leading to a sharp increase in the price volatility… in the global markets.”
Gallium and indium are necessary in the manufacturing of cell phones, air travel, lasers, computers, medicines, cosmetics and even clothing.
The main use for gallium today is manufacturing semiconductors. Gallium increases the functionality significantly over that of older technologies like silicon-based semiconductors.
Gallium is also necessary for a new type of light-emitting diode (LED), which won Japanese scientists the 2014 Nobel Prize in Physics. Eventually, all public and consumer lighting will use this new ‘blue light’ LED, cutting costs worldwide and increasing energy efficiency.
Gallium has significant commercial and military applications. It is used in the production of jet fighter aircraft, stealth, drone, and night vision technology, plus communication and armor piercing munitions, to name just a few.
Finally, when combined with indium and tin, gallium becomes an alloy called galinstan, a non-toxic Mercury substitute, making gallium essential for thermometers.
The rarity of gallium is undisputable; its supply is ‘inelastic.’ That is, gallium is not found in nature by itself, but is produced only as a byproduct of aluminum manufacture. As such, its supply is inextricably linked to the production of aluminum. Consequently, and as the Science Advances report has proven, production appears not to be keeping up with demand, and signals rising prices.
Indium was discovered by German chemists, Ferdinand Reich and Hieronymus Theodor Richter, in 1863, while looking for traces of the element thallium in samples of zinc ore.
Today, indium is found in all liquid crystal displays, touch screens, iPhones, flat screen TVs, computers and most of the popular 21st century innovations.
Indium is vital to sealing in cryogenic applications, high-end device cooling, semiconductor materials, integrated circuits, lasers and medical technology.
Indium is produced in the same way it was discovered, as a byproduct of zinc mining. Consequently, like gallium, its supply is ‘inelastic.’ Even if demand for indium rises, as the aforementioned report states, “its availability will not necessarily increase, because this availability is largely determined by zinc economics.” Inevitably, because of this, prices of indium will rise.
Given the scientific analysis, the certain-to-rise demand for gallium and indium and potential supply shortages, these metals have strong investment opportunity.
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