Alcoa Corp. Secures Substantial Support for Gallium Development in Western Australia

The United States and Australia announced a joint investment of US$2 billion to advance a gallium production facility that will be co‑located with Alcoa’s Wagerup alumina refinery in Western Australia. The partnership is part of a broader strategy to diversify critical‑mineral supply chains and reduce dependence on China.

Alcoa’s leadership confirmed that the project will leverage the company’s existing alumina infrastructure, allowing for integrated processing of bauxite to alumina and subsequently to gallium compounds. Gallium, a key component in semiconductor technology, displays strong demand growth as the world shifts toward 5G, electric vehicles and advanced display technologies.

Key Highlights of the Investment

Alcoa’s CEO noted that the partnership “underscores our commitment to securing a resilient supply of critical minerals while leveraging our expertise in alumina processing.” The company’s existing refinery in Wagerup has a capacity of 1.5 million tonnes of alumina per year, and the gallium project is expected to harness residual aluminum‑rich streams to produce high‑purity gallium.

Market Reaction

Shares of Alcoa Corp. (NYSE: AA) responded positively to the announcement. Following the release of the news, the stock rose from US$35.97 (closing price on 2025‑10‑16) to US$37.45 within the first trading session, reflecting investor confidence in the project’s strategic value. The 52‑week high of US$47.77 and low of US$21.53 illustrate the company’s recent volatility, yet the market cap of US$9.31 billion remains robust, supported by a price‑earnings ratio of 9.28.

Broader Context

The U.S. and Australian governments have been actively pursuing initiatives to expand the critical‑mineral sector, aiming to counter China’s dominance in rare earth and base‑metal markets. The gallium project aligns with this national priority and positions Alcoa as a leading supplier in a high‑growth niche of the aluminum industry.

Alcoa’s historical focus on bauxite, alumina, and aluminum products is complemented by the new venture, reinforcing the company’s role as a material manufacturing leader. The partnership also dovetails with Alcoa’s broader sustainability agenda, as gallium extraction from alumina by‑products can potentially reduce overall environmental impact relative to traditional mining routes.

Future Outlook

Alcoa is expected to commence construction of the gallium facility in late 2026, with commercial production projected for 2028. The company will continue to explore other critical‑mineral projects, leveraging its global supply chain and engineering expertise. Analysts anticipate that the gallium initiative will enhance Alcoa’s revenue diversification, potentially improving earnings per share in the long term.

In summary, the U.S.-Australia investment marks a pivotal moment for Alcoa Corp., reinforcing its strategic position in the evolving landscape of critical minerals while expanding its portfolio beyond conventional aluminum products.