METLEN Energy & Metals is developing a major new gallium production project in Greece, but the company has warned that a significant share of the future output could be sold outside Europe if European buyers continue to favour cheaper Chinese supplies.
The project is emerging as an important test of whether the European Union’s efforts to strengthen domestic critical minerals supply chains can translate into firm demand from European manufacturers.
METLEN Plans 50 Tonnes of Gallium Production
METLEN is investing approximately €295.5 million at its Aluminium of Greece complex to establish gallium production capacity of around 50 tonnes annually. The planned output would be broadly comparable with current European gallium demand, giving the project the potential to supply a substantial portion of the region’s requirements.
Production is scheduled to start gradually in 2027, with full-scale operations targeted for 2028. The project has also received €90 million in financing from the European Investment Bank, underlining its strategic relevance to Europe’s efforts to develop more secure supplies of critical raw materials.
U.S. Buyer Secures First Major Offtake
Despite the project’s European strategic importance, its first major long-term commercial commitment has come from outside the EU. METLEN signed an agreement with a U.S. technology company covering approximately 25% of the project’s future gallium production.
The agreement could provide the Greek project with greater revenue visibility and reduce commercial risk during the production ramp-up. It also highlights the challenge facing European critical-minerals projects: new capacity can be developed within Europe while the resulting material is ultimately contracted to customers elsewhere.
Chinese Gallium Dominance Creates Market Challenge
Gallium is an important material for semiconductors, telecommunications, defence equipment and power electronics. It is also used in advanced compounds including gallium arsenide and gallium nitride. Global primary gallium production is heavily concentrated in China, which has also introduced tighter export controls covering several strategic materials.
METLEN Executive Chairman Evangelos Mytilineos has warned that European buyers continue to favour lower-cost Chinese gallium, despite the EU’s objective of reducing dependence on concentrated overseas supply chains. That price competition could make it more difficult for European producers to secure long-term domestic customers without additional commercial incentives.
European Demand Becomes Critical
The situation highlights a gap between Europe’s supply-side industrial policy and actual market demand. Financial support, investment and new production capacity can increase the availability of gallium within Europe, but they do not automatically ensure that European manufacturers will purchase the material.
If European buyers continue prioritising short-term price advantages, part of the output from EU-supported projects could instead be sold to customers in markets such as the United States and Japan. For producers, overseas offtake agreements can improve project economics and provide greater certainty during the early stages of production. For European policymakers, however, the development raises questions about how domestic supply security can be achieved if local demand remains commercially weaker than competing imports.
Critical Minerals Strategy Faces Demand-Side Test
The experience of METLEN’s gallium project could increase attention on measures designed to support European demand for domestically produced critical materials. Potential approaches include long-term procurement agreements, strategic stockpiling and incentives for European sourcing.
Such mechanisms could help bridge the gap between the cost of establishing new European production and the prices available from established overseas suppliers. With planned capacity capable of covering a large share of current European gallium demand, METLEN’s Greek project is positioned as an important case for Europe’s broader critical minerals and supply-chain strategy. The project demonstrates that Europe can finance and develop new domestic production. The remaining commercial challenge is whether European industry will commit to buying the material once it is available.
