Metallium Lands US Critical Minerals Deal: Is This the Turning Point?

The race to secure critical minerals outside China just gained another player. Metallium (ASX: MTM) has signed a Letter of Intent with Pentagon-backed ElementUS to extract gallium and scandium from industrial waste at facilities in Texas and Louisiana. With up to US$10.1 million in non-dilutive funding on the table, this deal positions the Perth-based company at the centre of America's push for supply chain independence.

Why the World Is Scrambling for Gallium

China controls around 94% of the global gallium supply. In December 2024, Beijing weaponised this dominance by banning gallium exports to the United States entirely.

The impact was swift. By May 2025, gallium prices had jumped over 150% from pre-ban levels. The US Geological Survey warned that a prolonged embargo could cost the American economy between US$3 billion and US$8 billion, with chipmakers hit hardest.

The US isn't alone in its concern. Japan has accelerated recycling programmes to recover gallium from old electronics. The European Union declared gallium a "strategic raw material" and is funding alternative supply projects. This global scramble reflects a simple truth: gallium is irreplaceable in modern technology, from 5G networks to missile defence systems.

This explains why the Pentagon awarded US$29.9 million to ElementUS to build domestic gallium and scandium production. The Louisiana facility will extract these metals from red mud, waste left over from aluminium production, turning an environmental problem into a strategic asset.

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The Red Mud Opportunity

ElementUS has access to over 30 million tonnes of mineral-rich bauxite residue. Rather than mining new deposits, the company's approach extracts gallium and scandium from existing industrial waste. This model addresses both supply security and environmental cleanup, a combination increasingly attractive to government funding bodies.

Both minerals are essential for defence applications. Gallium is critical for semiconductors used in missile defence systems, advanced sensors, and hypersonic weapons. Scandium strengthens aluminium alloys used in aerospace manufacturing.

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Where Metallium Fits In

Metallium caught ElementUS's attention with its Flash Joule Heating (FJH) technology. In simple terms, FJH uses rapid electrical pulses to separate metals from waste, no furnaces, no acids, no lengthy processing. It's faster, cleaner, and can extract multiple metals, including gallium, rare earths, and gold.

Under the deal, Metallium could receive up to US$10.1 million across two stages: Phase A (US$3.7 million) funds a pilot at Metallium's Texas site, while Phase B (US$6.4 million) scales up operations in Louisiana.

This builds on a strong run of partnerships. In October 2025, Glencore signed an MOU to supply e-waste feedstock and purchase up to 75% of Metallium's recycled output. In September, Ucore Rare Metals locked in a collaboration combining Metallium's technology with Ucore's US government-backed rare earth refinery.

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The Bull and Bear Case

The bullish case for Metallium is built on strong industry confidence, with three major partnerships signed in just six months (Glencore, Ucore, ElementUS). Government-backed funding means the company doesn’t need to issue more shares, avoiding dilution, a common problem for smaller resource firms. Supportive policies, including Executive Order 14241, are also helping fast-track domestic minerals production.

On the other hand, the bearish case points out that Metallium is still pre-revenue, with its technology proven only in the lab and not yet at commercial scale. Many promising technologies fail when moving from demonstration to consistent production. The share price has already fallen about 40% from its high of A$1.48, showing that some investors are taking profits and factoring in execution risks. Future capital raises remain possible if progress takes longer than expected, adding uncertainty to the outlook.

Investor Takeaway

The ElementUS deal adds credibility to Metallium's technology and ties it directly to a well-funded US government initiative. For a company that was a junior explorer just two years ago, the partnership roster now reads like a who's who of the critical minerals space.

But credibility and cash flow are different things. The next 12 months will be decisive. Investors should watch for Phase A results from the Texas pilot, progress on the Glencore binding agreement (due by year-end), and any updates on commercial-scale performance. Success on these fronts could justify further re-rating. Failure to meet milestones may test investor patience.

For those tracking the broader critical minerals thematic, Metallium offers high-risk exposure to a sector with significant policy support. Position sizing and risk tolerance should guide any investment decision.

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To see which ASX resources stocks are positioned for the critical minerals theme, download ASR's free Top-3 Stocks & Market Outlook Report.

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