The U.S. Defense Department expects to provide roughly $174 million in equity financing to a gallium plant being built by Alcoa in Australia, as it seeks to loosen China's grip on critical minerals vital to defense technologies.

The U.S. said last year that it would invest in the project as it signed a critical-minerals framework with Australia, without disclosing the value of its potential contribution. Australia said at the time that it would provide up to $200 million in financing for the project, which is being developed jointly with Japan's government and trading house Sojitz.

"This landmark agreement with our key allies, Australia and Japan, will secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come," said Michael Cadenazzi, an assistant secretary of defense.

Gallium is vital to high-performance semiconductors used in military technologies, including advanced radars and missile-defense systems. A byproduct of processing bauxite ore for aluminum, it is rarely recovered outside China because it isn't especially profitable.

Securing new sources of gallium became a priority for policymakers after China introduced export restrictions in 2023.

The plant, which Pittsburgh-based Alcoa will build and operate, is expected to eventually produce about 100 metric tons of gallium annually, or up to 10% of global supply. It is being built at Alcoa's Wagerup alumina refinery in Western Australia.

The final dollar value of the U.S. equity financing investment is subject to exchange-rate fluctuations, the Defense Department said.