Terrain Minerals Limited (ASX: TMX) has continued to have success at its maiden air core drill programme which intersected multiple rare earth element (REE) mineralisation at its 100% owned Lort River Project near Esperance in Western Australia.
In addition to REE mineralisation, the reconnaissance drilling also returned encouraging assays from every hole for Gallium (Ga2o3).
Gallium is considered a critical mineral by the European Union whose economic importance to the EU is higher than that of any of the rare earth elements. Yet, despite its importance to the EU economy, unlike REE, gallium to date has not attracted the attention from the mainstream investment community.
Gallium is also a critical metal used in the defence industry and in the production of computer chip, semi-conductors, transistors, including light emitting diodes (LED) and electronic circuitry.
Until 1 August 2023, China was ostensibly the sole supplier to Gallium to the semiconductor industry, producing a staggering 98% of the world’s supply of raw Gallium. China’s strict export bans of Gallium came into effect on 1 August 2023.
Terrain is of the opinion that over the coming 12 months, economies like the USA and EU will start to actively engage directly with resource companies active within the gallium (and germanium) sector and, as such, the company has commenced routinely assaying for these evolving critical metals as part of its standard exploration activities.
Current projections suggest that the demand for gallium going forward will require more than a tenfold increase in primary production by 20501. Concerns over the future availability of gallium are due particularly to its importance in the production of thin-film photovoltaics as well as semiconductors.
The Company is presently undertaking a detailed analysis of gallium mineralisation and its market. This is inspired by the (unsolicited) interest the Company has received over the past few months from a number of parties since Terrain made its first gallium announcement on 16 August 20232.
Terrain sees similarities between what occurred in the lithium market over the past decade and the future growth of the gallium market over the next 10 years. For instance, prior to the mainstream uptake of electric vehicles, global demand for lithium was rather muted. As a result, lithium focused exploration was minimal, and the market capitalisation of lithium explorers were modest. Fast forward to the present day, and lithium exploration companies, even in early stage, are demanding significant market valuations that now push into the billions of dollars.
Likewise, as the world moves ever quicker towards green energy (such as photovoltaics) and the exponential growth of the Interest of Things (IoT) and generative artificial intelligence (AI), it would seem reasons to expect that the demand for specialised critical metals such as gallium would follow a similar exponential demand curve as that observed for lithium.