Similar to indium, gallium is a minor metal with no primary mining activity. Gallium is extracted from bauxite as part of the bauxite-alumina refining flow that most commonly utilizes the Bayer liquor process.

By all accounts, gallium-containing bauxite is plentiful in the earth’s crust and is widely distributed both geographically and politically. Similar to indium, this contributes to the stability of the supply of gallium feedstocks. More interesting, only a small portion (less than ten percent) of the potentially available gallium in the bauxite is actually extracted. Hence, the existing flow of bauxite processing offers tremendous capacity increases. Historically, the low extraction volume was limited more by the relatively small demand and economics of relatively low prices. For all practical purposes, gallium output is limited only by facilities investment and capacities.

As a conclusion, gallium is plentiful with intermittent volatility. The 2000 – 2001 mega price run-up was primarily due to inventory stocking by the cell-phone supply chain fearful of a shortage. In addition, poor communication up and down the supply chain contributed to the Availability of Indium and Gallium hoarding of material against a phantom demand. Hence, a massive over-supply (glut) followed the hoarding, driving prices to historic lows. The more recently constrained availability of gallium during 2007 and the resultant price run-up is an example of this intermittent volatility and does not reflect any long-term concern about supply.

GaAs wafers used for ICs in wireless devices consume the majority of gallium today. LED devices represent the second largest consumer of gallium followed by solar, batteries, alloys, and other minor applications. The reclaimed gallium from the GaAs wafer production is a significant part of the gallium reclaim and refining process. Any near-term supply and demand shortfall will only be due to the time required to bring facilities on-line.

Conclusion

Indium- and gallium-containing raw materials exist abundantly worldwide. The metals industry has been investing in process improvements and capacity over the last few years to bring more indium and gallium to the market. Suppliers can and will continue to do so if the demand continues. As described, price volatility and short-term availability may continue intermittently due to numerous factors, including the time-lag required to install additional capacity, government regulation, and the lack of information suppliers receive about future demand. Overall, we anticipate adequate indium and gallium supply and continued price affordability for current, emerging, and new applications.

http://www.commodityintelligence.com/images/2010/jan/11%20jan/availability_of_indium_and_galliumwhite_papermikolajczak_sept09.pdf