US Military Backs Major Gallium Production Initiative in Louisiana

The Pentagon is making a significant strategic move in the critical minerals sector. Through the Department of Defense, the military is committing $150 million in preferred equity to support a major expansion project centered on gallium production—a material essential to advanced defense systems and semiconductor technology.

The Investment Structure and Partner

The capital deployment targets ATALCO (Atlantic Alumina), a long-standing alumina refinery in Gramercy, Louisiana. This partnership pairs the Pentagon’s contribution with an additional $300 million from Pinnacle Asset Management, creating a coordinated financial effort to build domestic production capacity. The federal government is positioned to provide further funding support within 30 days following the transaction’s completion.

Why Gallium Matters

Gallium serves as a critical input for military applications and cutting-edge semiconductor manufacturing. Currently, China holds dominant positions in both the global alumina processing chain and gallium supply networks. By establishing production capability within US borders, the initiative directly addresses supply chain vulnerabilities and reduces dependence on foreign sources for materials classified as strategically essential.

ATALCO’s Strategic Position

Operating continuously since the late 1950s, ATALCO processes Jamaican bauxite into alumina at its Louisiana facility. Following a neighboring refinery’s 2020 closure, the site became the nation’s only large-scale alumina production center of its type. The facility currently meets approximately 40% of domestic alumina demand—a significant share that underscores its importance to the industrial base.

Upon full completion, the expanded operation is projected to produce over 1 million metric tons of alumina annually while generating up to 50 metric tons of gallium per year. Since gallium emerges as a by-product during alumina refining, the expansion captures an additional value stream that was previously unrealized.

Broader Policy Context

This Pentagon investment reflects a systematic approach by defense officials toward direct equity participation in supply-critical enterprises. The strategy aims to rebuild domestic production networks for rare earths and advanced materials. Prior initiatives included backing a $1.4 billion public-private partnership focused on rare earth magnet expansion, demonstrating consistent commitment to reshoring critical mineral capabilities.

The gallium facility development stands as a cornerstone move in transforming US industrial capacity for materials essential to national security and technological competitiveness.