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A Chinese ban on the export to the United States of critical minerals used to build semiconductors has the potential to disrupt the supply chain, affecting several ASX-listed companies.
On Tuesday, China’s Ministry of Commerce announced it would be banning the export of a suite of critical minerals – including gallium, germanium and antimony – to the US. These three are minerals key to the manufacture of multiple products, from military equipment to semiconductors, as well as having a general industrial purpose.
The announcement was both a ramp-up of Beijing’s previous restrictions on commodities central to the tech industry, but also a response to Washington’s decision the previous day to add to its restrictions on the export of advanced chips to China.
In terms of the former, one can track back to October 2023, when China placed tight regulations on the sale of graphite products, which play a central role in the manufacture of car batteries. This followed an announcement in July of that year, that exporters from the country would have to apply for special licences to export gallium and germanium to the United States.
Regarding the latter, we have the US government’s announcement on Monday that they would add to restrictions on chip-making equipment going to China, including the export of high bandwidth memory (HBM) chips – which play a key role in high-end applications such as AI training – plus 24 other chipmaking tools and three software tools.
Shipments of chipmaking equipment from Singapore and Malaysia to the US were also restricted, and Washington added140 Chinese companies to a list of those banned from trading with US firms.
US officials said their goal was to hinder China’s development of advanced AI, and weaken its production capabilities in relation to semiconductors used for high-tech products.
The latest series of explosions in the ‘tech war’ between the two countries has the potential to seriously disrupt the supply chain for critical minerals, impacting Australian-listed companies which are building their businesses around critical minerals products.
This includes Golden Deeps Ltd (ASX:GED), which since 2023 has been exploring the potential for high-grade gallium and germanium at its Nosib discovery in Namibia, and Battery Age Minerals Ltd (ASX:BM8), which is seeking germanium (as well as lead and zinc) at its Bleiberg project in Austria.
It remains to be seen where the tech war may go.
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