ERG plans to produce critical mineral gallium in Kazakhstan next year
LONDON, June 23 (Reuters) - Eurasian Resources Group plans to invest $20 million in facilities to produce critical mineral gallium in Kazakhstan from next year, from the bauxite ore it processes to produce alumina, the company said in a release on Monday.
Gallium is on the U.S. and European Union's lists of critical minerals. It is needed for the manufacture of semiconductors for electronics and radar systems and missile guidance electronics in aerospace and defence.
ERG's plans would make Kazakhstan, which until now has produced no gallium, the world's second largest producer after China.
"ERG plans to become a significant player in the global market for gallium, starting production in 2026 to supply OECD countries, with a view to expanding annual volumes up to 15 metric tons per annum," ERG CEO Shukhrat Ibragimov said.
Global gallium production totalled 760 tons last year according the U.S. Geological Survey. Most was from China and very small amounts from Japan, Korea and Russia.
China banned the export of gallium, germanium and antimony to the United States last December in response to a crackdown on China's chip sector by Washington.
Although the outright ban only applies to the United States, in the 18-months prior to the suspension, China had steadily introduced export licensing regimes for the three metals.
Alumina is used to smelt aluminium.
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Reuters
6 hours ago
- Reuters
ERG plans to produce critical mineral gallium in Kazakhstan next year
LONDON, June 23 (Reuters) - Eurasian Resources Group plans to invest $20 million in facilities to produce critical mineral gallium in Kazakhstan from next year, from the bauxite ore it processes to produce alumina, the company said in a release on Monday. Gallium is on the U.S. and European Union's lists of critical minerals. It is needed for the manufacture of semiconductors for electronics and radar systems and missile guidance electronics in aerospace and defence. ERG's plans would make Kazakhstan, which until now has produced no gallium, the world's second largest producer after China. "ERG plans to become a significant player in the global market for gallium, starting production in 2026 to supply OECD countries, with a view to expanding annual volumes up to 15 metric tons per annum," ERG CEO Shukhrat Ibragimov said. Global gallium production totalled 760 tons last year according the U.S. Geological Survey. Most was from China and very small amounts from Japan, Korea and Russia. China banned the export of gallium, germanium and antimony to the United States last December in response to a crackdown on China's chip sector by Washington. Although the outright ban only applies to the United States, in the 18-months prior to the suspension, China had steadily introduced export licensing regimes for the three metals. Alumina is used to smelt aluminium.
Telegraph
7 hours ago
- Telegraph
Iran risks enraging China by closing Strait of Hormuz
Closing the narrow Strait of Hormuz is a tempting option as Iran considers how to respond to the US attack on its nuclear facilities. However, shutting the channel to maritime traffic would be a monumental undertaking – one quite possibly beyond Iran's military capabilities. It would also be a mission fraught with hazards, risking enormous damage to Iran's tottering economy, potentially enraging its backer China – nearly half of whose total crude oil imports pass through the strait – and almost certainly inviting further, more extensive US military retaliation. The Strait of Hormuz is among the world's most vital maritime choke points. Located between Iran and Oman, it connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. While Iran could launch some of its dwindling stockpile of ballistic missiles at energy infrastructure in the Gulf, such direct action carries substantial risks of retaliation. Iran could instead rely on proxy groups to attempt limited disruption of shipping in the Persian Gulf — a 'plausible deniability' approach that could roil global energy markets without necessarily provoking an immediate US military response. It could mine the strait or attach limpets to the hulls of tankers — a middling course of action it might calculate would deter escalation. Iran chose this option during the tanker war and was accused of doing so to six commercial ships in 2019. Or, in desperation, it could wage a full-frontal, multi-pronged operation if it decides to draw the US into a large-scale war — an option that would entangle Donald Trump in the kind of 'forever conflict' he has long sought to avoid, but which would also imperil the survival of the Islamic regime. A fifth of global oil production — around 20 million barrels per day — passes through the strait. Blocking the narrow channel could gum up energy supply lines and send oil prices soaring — potentially doubling to $150 a barrel, according to some analysts, bringing misery to motorists across the world. China, heavily dependent on oil shipments through the strait, would probably feel the impact most acutely as pressure mounts on its strategic petroleum reserves. Beijing — despite its anti-US rhetoric and strong political and trade ties with Iran — is presumably using its leverage on Tehran not to take such a drastic step. China buys some 90 per cent of all Iranian crude oil. It is by far the largest destination for oil coming through the Strait of Hormuz with an estimation of 5.4 million barrels per day. Iranian oil accounts for as much as 15 per cent of the crude shipped to China. Closing the strait would also jeopardise Iran's own oil-dependent economy. Even under heavy sanctions, it still exports roughly 1.5 million barrels of crude a day. Iran exported $67 billion of oil in the year to March, bringing in its highest level of oil revenue in the past decade, according to estimates by the Central Bank of Iran. Some 20 million barrels of oil go through the Strait per day. A small amount of that goes to the US, accounting for about 7 per cent of total US crude oil. Iran also shares the largest natural gas field in the world, the South Pars field, with Qatar. Europe's imports from Qatar are providing nearly 10 per cent of its LNG needs. History suggests that when Iran believes the military imperative outweighs all other considerations, it is willing to gamble. During its eight-year war with Iraq in the 1980s, Iran attempted to seal the strait in retaliation to enemy attacks on its shipping. In a preview of the kind of action it may now be considering, Iran sought to close the strait by firing anti-ship cruise missiles at commercial vessels belonging to Iraq's trading partners. It also laid mines across the waterway. During the so-called tanker war, Iran launched attacks on 168 merchant vessels, while Iraq — better armed thanks to weapons supplied by the US and France — struck 238 ships. As security in the Gulf deteriorated in the 1980s, the Royal Navy dispatched the so-called Armilla Patrol to the region, despite having withdrawn its forces 'East of Suez' nine years earlier. With British commercial interests under threat, and following a plea from Washington, Margaret Thatcher deployed the Navy to protect merchant ships sailing under the Red Ensign and reassure friendly Gulf states. The Royal Navy is smaller today than it was then —it operates 14 destroyers and frigates now, compared with 64 in 1980. But it maintains a maritime presence in the Gulf under Operation Kipion, the successor to the Armilla Patrol, and has a naval support facility in Bahrain. Britain could therefore be called upon to support a US-led mission to keep the Strait of Hormuz open. Lessons from history There are grim lessons to be learnt from the past, as well. As the tanker war escalated, the US launched Operation Earnest Will in 1987 to protect Kuwaiti tankers from Iranian attack. Although the mission ensured that 98 percent of commercial vessels passed through the Gulf safely, it was nonetheless fraught with mishap. Even before the operation formally began, an Iraq air force jet mistakenly fired two Exocet missiles at the USS Stark, killing 37 American sailors. Three other US warships later struck Iranian mines. In the most infamous incident of the operation, the USS Vincennes mistakenly shot down a Iranian passenger airliner, killing all 290 people on board, shortly after a battle with Iranian naval forces. Whether or not Iran and the West are now doomed to repeat the tanker war remains to be seen — but history suggests such confrontations offer few rewards to either side.
Telegraph
7 hours ago
- Telegraph
Closing Strait of Hormuz would be ‘economic suicide', US warns Iran
Iran has been warned that shutting a major oil 'choke point' in the Middle East in retaliation for US strikes on its nuclear facilities would be 'economic suicide'. Marco Rubio, the US secretary of state, urged Iran's allies – including China – to prevent Tehran from shutting the Strait of Hormuz, saying it would be a 'terrible mistake'. 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,' Mr Rubio told Fox News. 'If they do that, it will be another terrible mistake. It's economic suicide for them if they do it. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours,' he added. Lawmakers in Tehran voted to respond to the US strikes by cutting off vital shipping lanes through the important shipping route following Donald Trump's decision to join the war between Israel and Iran. What is the Strait of Hormuz? The Iranian parliament's decision is not binding, and state television said a final decision would rest with top Iranian security officials, Reuters reported. But the strait, which lies in Iran's territorial waters, is the world's most important oil 'choke point' and acts as the gateway out of the Persian Gulf. Around one fifth of global oil supplies and a third of liquefied natural gas (LNG) pass through it. Any attempt by Iran to close the strait to shipping traffic – potentially by threatening vessels with mines or missiles – risks causing an oil supply shock, pushing up inflation and sparking a global recession. It could also trigger 'a significant military response' from the US and its allies, analysts warned on Sunday. In a note to clients, Eurasia Group, the political risk analysis and consulting firm, said: 'The US has amassed a massive military presence in the Gulf and surrounding region, and a move by Iran against the strait would almost certainly trigger a significant military response.' But Ami Daniel, the chief executive of Windward, a maritime data firm, warned that even a 'perception' that Iran may attack vessels passing through the strait risked curtailing shipping traffic. He said: 'People are talking about whether they block the Strait of Hormuz, but how about if they just make it very dangerous to go through? 'Commercial shipping is not the Navy. They don't have to go. So actually, even just increasing the risk to go there will gradually make a big difference versus blocking it completely.' At the same time, an oil crisis threatens to push up the price of petrol, which is refined from oil, in a blow to millions of drivers. The UK relies on imports for about half of its oil needs. The price of oil settled slightly at around $77 per barrel on Friday after Mr Trump vowed to give Iran two weeks to come to the negotiating table – prompting traders to assume there would be no immediate military action. But analysts now expect the price to surge higher on Monday as the market's 'risk barometer' goes up, with the threat of $100 per barrel or more. Bjarne Schieldrop, of SEB Research, said: 'Above $80 now looks very plausible. The next step from there would be actually losing oil supply to the market, through a blockade of the Strait of Hormuz or attacks on oil infrastructure inside the Persian Gulf. 'Everyone is now on edge trying to figure out what on earth [Iran is] going to do.' Ashley Kelty, an oil and gas analyst at Panmure Liberum, said another key question was how Iran's neighbours in the Middle East would respond. How closing it could affect the world If Tehran tries to block shipments out of the Strait of Hormuz, it will also hurt the exports of Saudi Arabia, Kuwait, Bahrain, Qatar and the United Arab Emirates. Mr Kelty said: 'Disrupting the Strait of Hormuz is the easiest way that Iran can respond. But the bigger question is: 'How much support does the Iranian regime have across the Arab world?' 'If they mine the strait, that basically involves all of the Middle East, because there's no way that the likes of the Qataris and Saudis are just going to sit back and watch as all their exports are shut in.' Qatar alone provides nearly one fifth of global LNG supplies. Mr Kelty said any crisis in the strait was unlikely to trigger a protracted 1970s-style oil crisis, but rather a 'short, sharp spike in crude prices'. He added: 'I'd say we're looking at something more akin to what we saw when Russia invaded Ukraine. If they go and mine it, we could be looking at $100 per barrel by the end of the week.' Iran is known to possess thousands of underwater mines, ranging from old-fashioned, moored 'contact' mines that blow up when ships touch them, to more modern 'bottom mines' that wait on the seabed until they detect ships above and surge upwards. Tehran's arsenal includes advanced rocket-propelled mines purchased from China, as well as bottom mines purchased from Russia. They can be laid using ships and submarines, with the Russian mines also deployable from the air. In the event the strait is mined, the US Navy could launch a clearance operation using at least four Avenger-class minesweeper vessels that it has forward deployed in Bahrain. Another four US minesweepers are based in Japan. But clearing the strait would be a painstaking and difficult task, given Iran's use of 'ship counting' and mines, which delay detonation based on how many ships pass over them, and anti-removal fuses that can complicate minesweeping efforts. Francis Tusa, an independent defence analyst, said such an operation would also require extensive air cover, probably provided by US Air Force jets operating from friendly bases in countries such as Saudi Arabia. Mr Tusa said: 'If they have the protection, it will be fine. They would need to put in place combat air patrols and probably frigates as well. 'The Americans have access to a lot of air bases. At times like these, the Saudis will just say, 'What do you need?'' He added that the Royal Navy also had one Sandown-class minesweeper still based in Bahrain, but it was still undergoing repairs after another ship crashed into it last year. 'Traditionally the Americans have relied on the Royal Navy as a global leader in mine countermeasures, but the UK has been retiring its mine warfare fleet,' Mr Tusa said. 'What I think is quite worrying and sad is, at the moment, in terms of America looking to Britain for help, the real issue now is what we could actually provide. It's a non-trivial question.' According to the RAC, a litre of unleaded petrol currently costs 132.06pc on average in Britain, with the same amount of diesel costing 138.19p per litre. On Sunday, analysts at Peel Hunt said they viewed an Iranian attempt to close the Strait of Hormuz as a 'tail risk' because of the 'far-reaching collateral damage' it would cause, particularly to China – which heavily depends on oil shipped from the Persian Gulf. They warned: 'It risks an all-out war with the most powerful country in the world, the US, and badly antagonising the second most powerful, China.' In a separate note to clients, Eurasia Group analysts said they did not expect Iran to fully close the strait while its own oil exports continued, but instead to increase 'harassment of tanker traffic'. Ships passing through the Strait of Hormuz have already experienced disruption in the past week as a result of GPS jamming in the area by Iran. Some 23pc of vessels in the area reported experiencing jamming on Sunday, or 1,600 out of around 7,000, according to maritime data provider Windward. That represented an increase of more than 60pc compared to Friday. Mr Daniel said the disruption was pushing up shipping and insurance rates, while shipping companies were also transiting the strait more slowly and cautiously – or cancelling voyages altogether. Windward's chief executive added: 'We're going to see a slowdown in exports from the gulf, at the very least.' How could it affect the UK? Any squeeze on global energy supplies is likely to increase scrutiny of Labour's crackdown on North Sea oil and gas, which critics claim is leaving the UK even more exposed to international crises. A new geological study published on Monday estimates that the North Sea contains up to 7.5bn barrels of extractable oil – double official estimates. The research contradicts claims by the North Sea Transition Authority, the regulator, that the UK only has around 3bn to 4bn billion barrels left. It says there are 27bn in total, of which 7.5bn can be produced – enough to support the UK through the energy transition. The report was commissioned by Offshore Energy UK, the industry trade body, which argues that the UK should be using its own resources for as long as it can rather than importing. But Ed Miliband, the Energy Secretary, has criticised further oil and gas development, arguing it would be harmful to the climate. He has instead called for Britain to speed up its adoption of renewable energy sources such as wind and solar so the country is less exposed to 'roller-coaster' gas prices.
