The Trump administration is considering a direct equity stake in a Louisiana-based refinery to establish what officials say would become the only large-scale producer of gallium in the US.
The Department of Defense is set to invest US$150 million in preferred equity in Atlantic Alumina, known as ATALCO, as part of a strategic partnership with an affiliate of Pinnacle Asset Management, according to Bloomberg.
The unannounced deal will fund an expansion of ATALCO’s alumina output and the construction of a new circuit to recover gallium, a critical metal used in military systems and advanced semiconductors.
Under the agreement, ATALCO will pair the Pentagon’s investment with an additional US$300 million from Pinnacle. The US government is also expected to provide additional funding within 30 days of the transaction’s closing.
“This strategic partnership is an essential step in reducing reliance on foreign nations for critical minerals,” ATALCO said.
Once fully built out, the facility is expected to produce more than 1 million metric tons of alumina annually and up to 50 metric tons of gallium per year. Gallium is typically recovered as a by-product of alumina refining, and China currently dominates both global alumina processing and gallium supply.
ATALCO has operated continuously since the late 1950s at its refinery in Gramercy, Louisiana, where it processes Jamaican bauxite into alumina, a fine white powder used in aluminum production.
After the closure of a neighboring refinery in 2020, the facility became the last alumina refinery of its kind in the country. The company says it currently supplies roughly 40 percent of domestic alumina demand.
The investment is a continuation of the Trump administration’s shift toward taking direct financial stakes in companies it views as strategically important in its effort to rebuild a domestic supply chain for rare earths and critical minerals.
Last November, the government backed a US$1.4 billion public-private partnership involving Vulcan Elements and ReElement Technologies, a subsidiary of American Resources (NASDAQ:AREC), to expand domestic rare earth magnet production.
In October, officials explored taking an equity stake in Critical Metals (NASDAQ:CRML), a US-listed company developing Greenland’s Tanbreez rare earths deposit.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
