PAYNE INSTITUTE COMMENTARY SERIES: COMMENTARY

By Ian Lange and Morgan Bazilian

July 29, 2026

1. Context

Germanium is not mined as a primary ore anywhere in North America. It comes out as a trace byproduct of zinc processing, at concentrations low enough that its supply follows the economics of zinc rather than germanium. Additionally, it depends on whether a smelter operator is willing to install a costly recovery circuit on top of ordinary zinc refining. That fact, more than any single company’s decision, explains why a metal essential to night vision optics, thermal weapon sights, laser rangefinders, and satellite solar arrays runs through a chain that reduces to a small number of US zinc operations feeding one foreign smelter.

In fact, of the three US zinc-bearing operations tracked here, two are now producing. The Middle Tennessee mines have been idle since November 2023 (USGS, 2026), but Bunker Hill Mining Corp. restarted its namesake silver-lead-zinc mine in Idaho’s Coeur d’Alene district, producing first concentrate on June 29, 2026 and trucking it to Teck’s Trail smelter that same month, on a path to 1,800 tonnes per day of throughput and commercial production by the end of 2026 (Bunker Hill Mining Corp., 2026). That gives Trail a second, and for now much smaller, domestic source of zinc concentrate, so the smelter’s germanium feedstock no longer rests on Red Dog alone. And the functioning smelter, Teck’s Trail complex in British Columbia, Canada, will not be the only one soon. Nyrstar’s former Clarksville, Tennessee smelter, now owned by Korea Zinc, is the anchor of a $7.4 billion rebuild meant to restore domestic recovery capability by 2029 (Korea Zinc, 2025).

Downstream of the smelter, three US firms convert imported or recycled germanium into defense-usable components. 5N Plus, in St. George, Utah, grows single crystal germanium for multijunction solar-cell substrates used on military and commercial satellites; the Department of War treats it as the effective sole domestic source of that capability. Umicore Optical Materials, in Quapaw, Oklahoma, converts germanium into germanium tetrachloride for fiber optics. Lattice Materials, in Bozeman, Montana, grows germanium and silicon crystal for the infrared lenses and windows used in thermal weapon sights and missile guidance. All three received federal awards through the Defense Production Act between September 2025 and January 2026, though each announcement was delayed by the government shutdown: $18.5 million to Lattice Materials, approved September 26, 2025 but not announced until December 29, 2025, for crystal growth and a new recycling line; $18.1 million to 5N Plus, approved December 15, 2025 but not announced until January 29, 2026, to raise recovered high-purity germanium output roughly sevenfold, to over 20 tonnes a year; and $11.8 million to Umicore Optical Materials, approved and announced January 30, 2026, to establish new processing capability at its Quapaw facility (US Department of War, 2025a, 2025b, 2026a, 2026b; Lattice Materials, 2025).

The Red Dog mine in Alaska, operated by Teck, produced 462,700 tonnes of contained zinc in 2025, down from 555,600 tonnes in 2024. Teck’s most recent guidance, issued in October 2025, has output falling further: 375,000 to 415,000 tonnes in 2026, 330,000 to 370,000 tonnes in 2027, and 230,000 to 270,000 tonnes in 2028, a steeper cut than the company projected at the start of 2025 (Teck Resources Ltd., 2026; North of 60 Mining News, 2025). The germanium content of the concentrate is not disclosed, but less zinc concentrate means less feedstock for the entire US-origin portion of the chain, an effect Bunker Hill’s ramp-up will only partly offset given its far smaller scale, nine concentrate trucks a day to Trail at steady state versus Red Dog’s much larger volumes (Mining.com, 2026). The Lik deposit near Red Dog is the most likely domestic successor at comparable scale, but is not yet a producing mine (North of 60 Mining News, 2024).

2. Price and Volume: What the Data Show

USGS’s annual average price series shows that germanium metal rose from $1,187 per kilogram in 2021 to $1,294 in 2022, $1,392 in 2023, $1,991 in 2024, and an estimated $4,100 in 2025, a 194 percent increase in two years and 245 percent since 2021 (USGS, 2026). Reported US imports of germanium metal for consumption fell over roughly the same period, from 21,000 kilograms in 2024 to an estimated 7,000 kilograms in 2025, a two-thirds drop that reflects tighter Chinese licensing and buyers drawing down existing stock rather than replenishing it at current prices. Western in-warehouse spot prices, tracked by commercial services rather than USGS, ran higher still: around $6,150 to $6,250 per kilogram in June and July 2026, roughly 83 percent above the Chinese domestic benchmark over the same window, a premium best read as the direct cost of the embargo and the licensing friction that persists even after China suspended the outright ban (Rare Earth Mining, 2026).

The Defense Logistics Agency has been a direct buyer of price insurance rather than a price taker. Its National Defense Stockpile held 14,000 kilograms of uncommitted germanium metal at the end of 2022, with 5,000 kilograms slated for disposal and none for acquisition in the FY2024 plan drawn up before the December 2024 ban (DLA Strategic Materials, 2023a, 2023b). That posture has since reversed. The FY2027 budget request seeks $18 billion for the stockpile overall, and 2025 legislation allocated $2 billion to stockpile expansion and $5 billion to an Industrial Base Fund (National Defense Magazine, 2026). A DLA scrap-recovery program, reclaiming germanium from decommissioned night-vision lenses and Bradley Fighting Vehicle turret windows, yielded 3,000 kilograms of 99.999 percent pure ingot in FY2022, about 10 percent of that year’s US demand for purified germanium, per DLA’s FY2022 stockpile report as cited in CRS R47833. GAO’s own 2024 review of the stockpile corroborates the broader point, finding that DLA’s recycling program secures roughly a tenth of nationwide purified-germanium demand: a useful but partial hedge that depends on equipment being retired rather than on any price-elastic supply response (CRS R47833; GAO-24-106959).

3. Concentration

Applying a standard concentration measure to the 2021–24 US import shares for germanium metal, China 41 percent, Belgium 27 percent, Germany 25 percent, Russia 3 percent, other 4 percent, gives a Herfindahl-Hirschman Index of about 3,060 (USGS, 2026). The Justice Department and Federal Trade Commission treat a value above 2,500 as highly concentrated. Germanium’s import base clears that bar comfortably, and the true picture is tighter still, since China, Belgium, and Germany are themselves repackaging or re-refining material sourced from a smaller set of primary producers.

The Belgian share is the more interesting problem, because it looks like diversification and mostly is not. The Stimson Center’s reconciliation of Chinese and Belgian customs data found that China’s reported germanium exports to Belgium rose roughly 224 percent from 2022 to 2024, while direct exports to the United States fell to nearly zero over the same period. The two shifts were close to offsetting: 5,900 fewer kilograms reaching the United States against 6,150 more kilograms reaching Belgium, such that China’s combined shipments to the two countries barely moved, 10,750 kilograms in 2023 against 11,000 kilograms in 2024 (Stimson Center, 2025). A meaningful share of what trade statistics record as US exposure to Belgium is, on a multi-hop basis, exposure to China relabeled by a change in the last port of export. USGS separately estimates that a full Chinese cutoff would raise US germanium prices by roughly 26 percent and cost the US economy about $3.4 billion, even accounting for these workarounds (USGS, 2024).

4. Military Demand Versus the Wider Economy

Defense planners tend to describe the germanium problem as a China problem. That is largely correct, but it obscures a second and more immediate competition with fast-growing civilian demand.

Fiber optics is the largest single US end use for germanium, and demand is rising on the back of the AI data center buildout, which requires large volumes of germanium tetrachloride glass for long-haul and campus interconnects. Umicore’s Quapaw, Oklahoma plant supplies that market from the same import pool that feeds defense optics.

Satellite solar power is a more direct overlap. 5N Plus’s St. George, Utah plant, the facility the Department of War already treats as its effective sole domestic source of germanium substrates, sells into both military and commercial constellations. The rapid buildout of commercial low-earth-orbit networks competes for the same multijunction cell substrate capacity that supplies national-security space programs, at a plant with no domestic alternative if it cannot meet both.

None of the federal investment announced since late 2025, the Clarksville rebuild, the CHIPS award, or the 5N Plus and Lattice Materials grants, comes with a contractual guarantee that defense end users get first call on germanium output ahead of commercial buyers. The Defense Production Act gives the government legal authority to prioritize military-rated contracts in a declared emergency, but that authority has not been invoked for germanium. Short of invoking it, DoD procurement competes on price like any other buyer, in a market where AI infrastructure and satellite constellation firms are currently better capitalized and less price-sensitive than most defense subcontractors. Until Clarksville reaches production, or until DoD negotiates offtake agreements that specifically carve out defense volumes, the stockpile and the scrap-recovery program are the only capacity the department does not have to bid for.

5. Risk Assessment

Three structural risks are highlighted here. The foreign-processing chokepoint is the most acute. Effectively all germanium recovered from US-mined zinc concentrate is recovered outside the United States, at a single Canadian smelter. Canada is a treaty ally, which lowers the risk relative to dependence on China, but a labor stoppage or a Trail facility outage would still sever the entire US mine-to-metal link, since Bunker Hill’s concentrate goes to the same smelter rather than an alternate one. Bunker Hill’s restart does ease one specific version of this risk: a shift in Teck’s own allocation of Red Dog concentrate toward Asian, European, or Australian buyers, all of which already receive a share of output, would no longer by itself cut off Trail’s US-origin feedstock, since Trail now also draws on Bunker Hill concentrate. That second source remains small relative to Red Dog and its germanium content is undisclosed, so it tempers rather than eliminates the single-mine dependency this risk describes.

The upstream ore base is shrinking regardless of what gets built downstream. Red Dog’s own guidance shows contained zinc output falling by roughly 55 percent between 2024 and the 2028 guidance floor as the mine works through its remaining ore zones, a decline that predates and is independent of any germanium-specific grade effect.

China’s willingness to use export licensing as leverage against US military end users specifically, demonstrated twice since 2023, remains the dominant external risk. The November 2025 suspension of the outright ban runs only to November 27, 2026, and any program or contract that assumes continued Chinese-origin supply, direct or transshipped, carries rollover risk back to full embargo conditions on that date. Notably, the suspension addressed only the general commercial ban; MOFCOM’s own announcement left in place the separate prohibition on exports to US military end users and end uses, meaning the defense-specific channel may remain closed even while the broader suspension is in effect (Reuters, 2025).

6. Conclusion

The premise that the North American germanium chain for military applications reduces to two US zinc mines feeding one Canadian smelter used to be accurate. Today, two mines are producing, Red Dog and, as of June 2026, the restarted Bunker Hill mine in Idaho, though Bunker Hill’s output is a fraction of Red Dog’s and its germanium content is undisclosed. That restart means Trail’s feedstock no longer rests on Red Dog alone, but the Canadian smelter’s near-term monopoly on domestic-concentrate recovery is still the explicit target of a $7.4 billion rebuild of a second, US-based smelter, alongside two smaller but immediate awards to expand US crystal growth and refining. The US import base is highly concentrated on a standard test, HHI approximately 3,060, and a meaningful share of the apparent Belgian sourcing is Chinese material rerouted through a third country after direct exports collapsed.

USGS’s own annual average price for germanium metal rose 194 percent from 2023 to 2025, before the further run in Western spot prices through mid-2026, while reported import volumes fell by two thirds. Recycling and stockpile programs cover roughly a tenth of purified-germanium demand and provide a useful buffer. None of it substitutes for a domestic mine-to-metal chain that does not yet exist, and none of it resolves the fact that when the chain does tighten, the military is one buyer among several, competing for the same thin pool of material against a faster-growing civilian market with no guaranteed priority of its own.

References

Bunker Hill Mining Corp., 2026. Bunker Hill Produces First Concentrate on Schedule for Shipment to Trail Smelter. Press release, 29 June 2026. https://www.bunkerhillmining.com/news-and-media/news-releases/bunker-hill-produces-first-concentrate-on-schedule-for-shipment-to-trail-smelter

China, Ministry of Commerce (MOFCOM), 2024. Announcement Concerning Strengthening Controls on Exports of Relevant Dual-Use Items to the United States, Notice No. 46, 3 December 2024. Translated in Center for Security and Emerging Technology, 2024. https://cset.georgetown.edu/publication/china-rare-earth-export-ban/

Congressional Research Service (CRS), 2023. Emergency Access to Strategic and Critical Materials: The National Defense Stockpile, R47833. https://www.congress.gov/crs-product/R47833

Defense Logistics Agency Strategic Materials, 2023a. Annual Materials Plan for FY 2024 (Potential Acquisitions), DLA-SM-23-3239.

Defense Logistics Agency Strategic Materials, 2023b. Annual Materials Plan for FY 2024 (Potential Disposals), DLA-SM-23-3238.

Korea Zinc, 2025. Korea Zinc Partners with the U.S. Department of War and U.S. Department of Commerce to Build a State-of-the-Art Critical Minerals Smelter in the United States. https://www.koreazinc.co.kr/en/korea-zinc-partners-with-the-u-s-department-of-war-and-u-s-department-of-commerce-to-build-a-state-of-the-art-critical-minerals-smelter-in-the-united-states-with-6-6-billion-of-capital-expenditures/

Lattice Materials, 2025. Lattice Materials Awarded $18.5 Million from the U.S. Department of War. PRNewswire, 29 December 2025. https://www.prnewswire.com/news-releases/lattice-materials-awarded-18-5-million-from-the-us-department-of-war-302650180.html

Mining.com, 2026. Bunker Hill Rebuild Ships First Idaho Ore, Eyes Silver. https://www.mining.com/bunker-hill-rebuild-ships-first-idaho-ore-eyes-silver/

National Institute of Standards and Technology (NIST), 2025. Department of Commerce Awards CHIPS Incentives to a Subsidiary of Korea Zinc (Crucible Metals). https://www.nist.gov/news-events/news/2025/12/department-commerce-awards-chips-incentives-subsidiary-korea-zinc-crucible

National Defense Magazine, 2026. Defense Logistics Agency Modernizing At Same Pace as Services. https://www.nationaldefensemagazine.org/articles/2026/7/6/defense-logistics-agency-modernizing-at-same-pace-as-services

North of 60 Mining News, 2024. Red Dog Ends 2023 with Solid Production. https://www.miningnewsnorth.com/story/2024/02/23/news-nuggets/red-dog-ends-2023-with-solid-production/8407.html

North of 60 Mining News, 2025. Mixed News for Red Dog Zinc Production, 24 October 2025. https://www.miningnewsnorth.com/story/2025/10/24/news-nuggets/mixed-news-for-red-dog-zinc-production/9320.html

Nyrstar NV, 2023. Nyrstar’s Middle Tennessee Mines Operations to Temporarily Pause Production. Press release, 31 October 2023. https://www.nyrstar.com/resource-center/press-releases/nyrstars-middle-tennessee-mines-operations-to-temporarily-pause-production

Rare Earth Mining, 2026. Germanium Price Today: Spot, FOB and Western Warehouse. https://rare-earth-mining.com/germanium-price/

Reuters, 2025. China Suspends Ban on Exports of Gallium, Germanium, Antimony to US, 9 November 2025. https://www.aol.com/articles/china-suspends-ban-exports-gallium-033255034.html

Stimson Center, 2025. China’s Germanium and Gallium Export Restrictions: Consequences for the United States. https://www.stimson.org/2025/chinas-germanium-and-gallium-export-restrictions-consequences-for-the-united-states/

Teck Resources Ltd., 2026. Form 6-K / 40-F, FY2025 Annual Report Extract. Filed with the US Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/886986/000088698626000004/teck-20251231xexx993mda.htm

US Department of War, 2025a. Department of War Invests $18.5 Million to Expand Germanium and Silicon Optics Production. Approved 26 September 2025, announcement delayed by the government shutdown. https://www.war.gov/News/Releases/Release/Article/4366365/department-of-war-invests-185-million-to-expand-germanium-and-silicon-optics-pr

US Department of War, 2025b. Department of War Invests $18.1M to Increase U.S. Refining Capacity for Germanium Metal. Approved 15 December 2025. https://www.war.gov/News/Releases/Release/Article/4393075/department-of-war-invests-181m-to-increase-us-refining-capacity-for-germanium-m

US Department of War, 2026a. Department Of War Spends $18.1 Million To Expand U.S. Germanium Refining For Military Use, publicly announced 29 January 2026 following a delay caused by the government shutdown. https://www.yahoo.com/news/articles/department-war-spends-18-1-150004142.html

US Department of War, 2026b. Department of War Invests $11.8M for the Domestic Processing of Critical Materials. Approved and announced 30 January 2026. https://www.war.gov/News/Releases/Release/Article/4410424/department-of-war-invests-118m-for-the-domestic-processing-of-critical-materials

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US Government Accountability Office (GAO), 2018. Umicore Optical Materials USA, Inc., B-415546, B-415546.2, decided 19 January 2018. Washington, DC: GAO.

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ABOUT THE AUTHORS

Ian Lange
Professor, Economics and Business, Colorado School of Mines

Ian Lange is the Viola Vestal Coulter Chair of Mineral Economics at the Colorado School of Mines. Additionally, Ian serves as Chair of the U.S. Commodity Futures Trading Commission’s (CFTC) Role of Metals Markets in Transitional Energy Subcommittee. He is a member of the Colorado Governor’s Revenue Estimating Advisory Committee. Previously Ian has served as Senior Economist for Energy at the Council of Economic Advisors for both the Trump and Biden administrations as well as spending time at the U.S. Environmental Protection Agency and the U.S. Department of Energy.

Morgan Bazilian
Director, Payne Institute and Professor of Public Policy, Colorado School of Mines

Morgan Bazilian is the Director of the Payne Institute and a Professor of public policy at the Colorado School of Mines. Previously, he wD.as lead energy specialist at the World Bank. He has over two decades of experience in the energy sector and is regarded as a leading expert in international affairs, policy and investment. He is a Member of the Council on Foreign Relations.

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