On April 4, 2025, China imposed export controls on seven heavy rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — along with their compounds, metals, alloys, and any magnets containing them. On October 9, 2025, Beijing expanded the controls to include holmium, erbium, thulium, ytterbium, and — critically — “parts, components, and assemblies” containing any of these materials, including products manufactured outside China using Chinese-sourced inputs at concentrations as low as 0.1%. The controls were suspended on November 7, 2025, as part of the Xi-Trump trade agreement, for one year until November 2026. They are, as of this writing, frozen — not withdrawn. Before the suspension, European dysprosium oxide prices reached $900 per kilogram, roughly triple the Chinese domestic price of $255. Terbium oxide was trading at levels that caused suppliers to halt sales to private investors entirely, prioritizing industrial customers. The CEO of Germany’s Vacuumschmelze — one of the few rare earth magnet manufacturers outside China — told Reuters in November 2025: “If you talk about critical resources, it’s really the heavies, the heavies, the heavies — all the rest we will get.” He was talking about terbium and dysprosium. And he was right.

What terbium does

Terbium is a heavy rare earth element — atomic number 65 — and its industrial importance is almost entirely about magnets. Neodymium-iron-boron permanent magnets are the most powerful permanent magnets in existence, used in every EV traction motor, every direct-drive wind turbine generator, every hard disk drive, every guided missile, every MRI machine, and most industrial robots. The problem with NdFeB magnets is that they lose their magnetic properties at elevated temperatures — above roughly 80°C, an NdFeB magnet begins to demagnetize. An EV motor operating under sustained load, a wind turbine nacelle in summer heat, a fighter jet engine bay — all exceed that threshold. Adding small quantities of terbium or dysprosium to the alloy extends the operating temperature range to 200°C or higher. The addition is small — a few percent by weight — but the effect is the difference between a magnet that works in a laboratory and a magnet that works in a car.

Terbium is the more effective of the two heavy rare earth additives — it provides stronger coercivity enhancement per unit of concentration than dysprosium — but it’s also rarer and more expensive. In practice, magnet manufacturers use both, often in combination, depending on the application’s thermal requirements and the relative cost and availability of each. For the highest-performance applications — military systems, aerospace actuators, precision guidance systems — terbium is preferred. For lower-temperature applications, dysprosium suffices.

Beyond magnets, terbium has a secondary role in phosphors — it emits a vivid green light when excited, which made it essential for color television, fluorescent lighting, and trichromatic display systems. LED technology has largely displaced fluorescent phosphors, but terbium-based phosphors remain relevant in medical imaging, scientific instruments, and specialized displays. Terbium is also the primary component of Terfenol-D — an alloy of terbium, dysprosium, and iron that exhibits the strongest magnetostriction of any known material, meaning it physically expands and contracts in response to magnetic fields. Terfenol-D is used in naval sonar transducers, precision actuators, and vibration sensors. A submarine’s ability to detect other vessels depends, in part, on terbium.

Where 98% comes from

China controls over 90% of refined terbium supply. The highest-grade commercial deposits are ion-adsorption clays in southern China — Jiangxi, Guangdong, Fujian — where heavy rare earths are adsorbed onto clay particles and extracted by leaching with ammonium sulfate. A ton of clay yields a few hundred grams of mixed rare earth oxides, of which terbium might constitute a few grams. The extraction is low-tech, environmentally destructive (the leaching process contaminates groundwater and strips hillsides), and labor-intensive — but the deposits are uniquely rich in the heavy rare earths the magnet industry needs.

Myanmar has become the second most important source of heavy rare earth ore — mined primarily in the Kachin and Wa states by ethnic militias operating in a civil war zone, shipped across the Chinese border, and processed in Chinese separation facilities. The ore flows through a corridor that China effectively controls on both ends: the armed groups who mine it depend on Chinese buyers, and the separation capacity that converts raw ore into usable oxide is 98-99% concentrated in China. Conflict minerals is a term usually applied to the DRC’s cobalt and coltan supply chains. The Myanmar heavy rare earth trade has the same structural characteristics — extraction in a conflict zone, processing controlled by an external power, and end-use in consumer products whose buyers rarely ask where the material came from.

The West has deposits but not capacity. MP Materials’ Mountain Pass mine in California produces light rare earths — neodymium and praseodymium — but contains only traces of terbium and dysprosium. Lynas Rare Earths in Australia began heavy rare earth separation in Malaysia in 2025, becoming the first non-Chinese heavy rare earth separator on Earth — but at initial volumes of roughly 250 tonnes of dysprosium and 50 tonnes of terbium per year, it’s a fraction of global demand. Energy Fuels, a Denver-based uranium miner, is pivoting to rare earth separation using similar process chemistry — but is not yet producing at scale. Brazil is emerging as an ore exporter, but as Benchmark Mineral Intelligence noted, “the technology for HREE refining is expected to be available globally by 2029” and “costs outside of China remain 5-7 times higher.” The problem is not that heavy rare earth deposits don’t exist outside China. The problem is that the separation and refining capacity to convert those deposits into usable materials is, as of 2026, a Chinese monopoly with a few early-stage Western competitors years away from meaningful scale.

The April 2025 export controls

The April 2025 controls followed the same escalation pattern the Rare Earth Elements course has documented across gallium/germanium (July 2023), graphite (October 2023), antimony (August 2024), and tungsten (early 2025) — but with a crucial escalation. The earlier controls restricted raw materials and processed forms. The April 2025 controls restricted magnets containing terbium and dysprosium — finished products, not just feedstock. The October 2025 expansion went further: it applied extraterritorial jurisdiction to “parts, components, and assemblies” containing Chinese-sourced rare earth materials, even if manufactured outside China, even if traded domestically in a third country. A European carmaker using a motor containing a magnet with 0.1% Chinese-origin terbium would, under the October rules, need a Chinese export license for the motor — not for the terbium, for the motor.

The IEA reported that after the April controls took effect, “many carmakers in the United States, Europe, and elsewhere struggled to obtain permanent magnets, with some forced to cut utilisation rates or even temporarily shut down factories.” European rare earth prices reached up to six times Chinese domestic prices. The November 2025 suspension froze the escalation but did not reverse it. The controls remain on the books. The licenses remain at Beijing’s discretion. The semiconductor supply chain has TSMC in Taiwan. The lithium supply chain has Chinese refining. The magnet rare earth supply chain has something worse: Chinese separation capacity so dominant that the export controls don’t just restrict supply — they assert jurisdiction over finished products manufactured anywhere in the world using Chinese-origin inputs. That’s not a trade restriction. That’s extraterritorial industrial policy.

Why terbium is the real bottleneck

McKinsey projects global demand for magnet rare earths will triple from 59,000 tonnes in 2022 to roughly 176,000 tonnes by 2035. Under rapid clean-energy adoption scenarios, terbium requirements could reach 134-256% of available supply — meaning the energy transition needs one-and-a-half to two-and-a-half times more terbium than the planet currently produces. The EU projects that demand for rare earth magnets could increase tenfold by 2050. The projected 60,000-tonne shortfall by 2035 — approximately 30% of total requirements — is concentrated in the heavy rare earths, not the lights. Neodymium and praseodymium can be sourced from Mountain Pass, from Lynas, from emerging projects in Brazil and Africa. Terbium and dysprosium cannot — not at the volumes the market needs, not at processing costs the market can absorb, and not from facilities that currently exist outside Chinese control.

Every EV motor, every wind turbine, every humanoid robot actuator, every military guidance system that requires a high-temperature permanent magnet runs into the same constraint: the heavy rare earths that make the magnet work at temperature come from one country, are separated in one country, and are now subject to export controls that assert jurisdiction over products made in every other country. The nickel supply chain was restructured by Indonesian resource nationalism in five years. The terbium supply chain was never diversified enough to restructure — it started concentrated and stayed concentrated, and the concentration is now being weaponized.

This is the kind of supply chain our Rare Earth Elements course was built to map — where the element that allows an EV motor magnet to survive operating temperature is separated from clay in southern China and a civil war zone in Myanmar, refined in facilities that are 98% Chinese-controlled, subject to export controls with extraterritorial reach, and projected to be in deficit by 2035 under every growth scenario the energy transition requires.

Global rhenium production in 2024 was approximately 62,000 kilograms — 62 tonnes. That’s it. The entire world’s annual output of the metal that allows jet engines to operate at 1,700 degrees Celsius without the turbine blades melting would fit inside two shipping containers. Rhenium prices rose 91.5% in 2025, then added another 34% in the first quarter of 2026, reaching roughly $2,400 per kilogram in Europe. The price action isn’t speculative froth — it’s a structurally tiny market absorbing the largest commercial aviation production ramp-up in history. Boeing and Airbus have combined backlogs of more than 15,000 aircraft. Each wide-body jet engine contains several kilograms of rhenium concentrated in the turbine blades that spin at 40,000 RPM in exhaust gas temperatures that would liquefy any unalloyed metal on the periodic table. A single company — Molymet S.A. in Chile — controls 60% of global rhenium production. Rhenium has no primary mine anywhere on Earth. It is recovered exclusively as a by-product of molybdenum roasting, which is itself a by-product of copper mining. The by-product supply ceiling that constrains indium, tellurium, and the noble gases applies here in its most extreme form: rhenium is a by-product of a by-product. Two layers of someone else’s business model between you and the metal your jet engine needs.

What rhenium does

Rhenium has the third-highest melting point of any naturally occurring element — 3,186°C — and the highest boiling point of all. When alloyed with nickel at 2-6% by weight, it forms single-crystal superalloys — materials like CMSX-4 and René N5 — that retain their structural integrity under the combination of extreme heat, extreme mechanical stress, and corrosive combustion gases that exist inside a jet engine’s high-pressure turbine section. Without rhenium, turbine blades deform under the sustained loading at operating temperature — a failure mode called creep — and the engine loses efficiency, thrust, and eventually structural integrity. The addition of rhenium doesn’t just improve performance. It makes the performance possible. Modern high-bypass turbofan engines like the GE9X (which powers the Boeing 777X) and the Rolls-Royce Trent XWB (which powers the Airbus A350) were designed around rhenium-containing superalloys. You cannot substitute the rhenium out of these engines without redesigning the turbine, recertifying the engine, and accepting lower operating temperatures that reduce fuel efficiency — a process that takes years of testing and hundreds of millions of dollars in development cost.

Roughly 80% of global rhenium consumption goes into aerospace superalloys. The remaining 20% splits between petroleum refining catalysts — rhenium-platinum catalysts are essential for producing high-octane lead-free gasoline — and a growing list of niche applications including medical isotopes (rhenium-186 and rhenium-188 for cancer therapy), radiation shielding, and high-precision surgical instruments.

The double by-product problem

The rhenium supply chain is the purest expression of the by-product constraint the Rare Earth Elements course has been documenting across indium/tellurium, noble gases, and iridium within the PGM complex. But rhenium adds a layer of complexity the others don’t have.

Copper is mined from porphyry deposits in Chile, the United States, Peru, and Kazakhstan. Some of those copper ores contain molybdenite — a molybdenum sulfide mineral — which is recovered as a by-product of copper processing. The molybdenite concentrate is then roasted to produce molybdenum trioxide, and during that roasting process, rhenium volatilizes out of the concentrate as rhenium heptoxide in the flue gas. Specialized scrubbers in the roasting facility’s exhaust system capture the rhenium. If the scrubbers aren’t installed, or aren’t optimized for rhenium recovery, the rhenium exits the smokestack and disperses into the atmosphere. Gone.

Chile produced 29,000 kilograms of rhenium in 2024 — nearly half the global total — because Chile has the world’s largest copper-molybdenum porphyry deposits (Escondida, Chuquicamata, El Teniente) and because Molymet, the Santiago-based molybdenum processor, installed rhenium recovery equipment decades ago and has since acquired downstream processing capacity including Rhenium Alloys in Ohio, now operating as Molymet Alloys USA. The United States produced 9,500 kg, mostly from Freeport-McMoRan’s copper-molybdenum operations in Arizona and New Mexico. Poland produced 9,400 kg from KGHM’s copper operations. China produced 5,300 kg. The entire rest of the world produced the remainder.

The structural constraint is identical to indium’s but twice compounded: if the world needs more rhenium, it needs more molybdenum roasting capacity with rhenium recovery equipment installed, which requires more molybdenum concentrate, which requires more copper mining. The decision to expand copper production is made by copper companies based on copper economics. The decision to install rhenium scrubbers is made by molybdenum processors based on rhenium prices relative to scrubber capital costs. At each layer, the entity making the production decision is optimizing for a different metal than the one the aerospace industry needs. Supply elasticity is, in the language of the economics textbooks, structurally constrained. In the language of the Battlefields of the Future course: the fighter jet’s turbine blade depends on a molybdenum roaster in Chile deciding the flue gas scrubber is worth the investment.

The aerospace bottleneck

The demand side of the rhenium market is defined by a single fact: the global aviation industry is attempting the largest production ramp-up in its history, and every new engine needs rhenium. The pandemic cleared factory floors, grounded aircraft, and delayed maintenance cycles. The recovery has produced backlogs that will take a decade to work through. Every widebody engine, every military fighter jet engine, every industrial gas turbine that uses rhenium-containing superalloys draws from a 62-tonne global pool. Demand is projected to grow at 2.1% annually through 2034 — a modest growth rate in percentage terms, but applied to a base so small that even modest demand growth tightens supply.

Turbine blades have 15-to-25-year service lives before they’re retired and recycled. The recycling rate for rhenium from spent superalloys and foundry revert material is 25-50% — significantly better than most critical minerals but constrained by long collection cycles and the capital intensity of superalloy recycling. GE Aerospace and Rolls-Royce have both established closed-loop product stewardship programs to recover rhenium from spent blades. The rare earth recycling infrastructure the course has documented is nascent for most minerals. For rhenium, it’s more mature — but still limited by the physics of 15-year wait times between engine installation and blade retirement.

GE and Rolls-Royce have also invested in “rhenium-lean” and “rhenium-free” superalloy formulations using combinations of ruthenium, tantalum, hafnium, tungsten, and molybdenum. Some newer engine designs have successfully reduced rhenium loading. But the installed fleet and the engines currently in production were designed around rhenium-containing alloys, and redesigning a turbine blade is not a materials-substitution exercise you complete in a quarter. Each new alloy formulation requires years of creep testing, oxidation testing, fatigue testing, engine testing, and FAA certification before it can be deployed in a commercial aircraft. The semiconductor supply chain can redesign a chip in 18 months. A turbine blade alloy substitution takes a decade.

Why it’s in the course

Rhenium is the Rare Earth Elements course’s most extreme case study of by-product dependency — and the one that connects the critical minerals thesis directly to the aerospace and defense industrial base. The antimony post documented a mineral whose supply was disrupted by deliberate export controls. The nickel post documented a market restructured by deliberate resource nationalism. The noble gases post documented a supply chain that concentrated by accident and broke because of a war. Rhenium is none of those things. Rhenium’s supply constraint is the most permanent kind: the element is genuinely one of the rarest on Earth — 1 part per billion in the crust, rarer than gold, rarer than platinum, rarer than all but a handful of stable elements — and it can only be obtained as a by-product of a by-product, from mines built for a different purpose, processed by companies optimizing for a different metal, at volumes that cannot be meaningfully increased without expanding copper mining globally.

The lithium supply chain has a demand problem — consumption is growing faster than supply can respond. The copper supply chain has a capacity problem — there aren’t enough mines being built. Rhenium has a physics problem. There is no rhenium mine to build. There is no rhenium deposit to discover. There is only the copper-molybdenum system, the flue gas, the scrubber, and the 62 tonnes per year that represents the ceiling the aerospace industry is building its production ramp-up under.

This is the kind of supply chain our Rare Earth Elements course was built to map — where the metal that allows a turbine blade to survive 1,700 degrees at 40,000 RPM is recovered from the smokestack exhaust of a molybdenum roaster in Santiago, at 62 tonnes a year, with a single company controlling 60% of global output, and the entire commercial aviation industry’s production backlog competing for every gram.

On February 24, 2022, Russia invaded Ukraine. Within days, two companies in Odessa and Mariupol — Cryoin and Ingas — shut down their operations. Together, they had been producing roughly 50% of the world’s semiconductor-grade neon. Ukraine as a whole supplied approximately 70% of global neon, 40% of krypton, and 25-30% of xenon — the three noble gases that power the lasers used to etch circuits onto every advanced semiconductor chip manufactured on the planet. Neon prices in China rose tenfold within weeks. Krypton prices in Japan quadrupled. Xenon, which had traded at $15 per liter in 2020, spiked above $100. The world’s most sophisticated industry — semiconductor fabrication — discovered that it was dependent on gases captured from Soviet-era steel mills in a war zone, purified by two mid-sized companies in cities that were being bombed. The concentration wasn’t the result of geological scarcity. Neon, krypton, and xenon exist everywhere — they’re in the air you’re breathing right now. The concentration was an accident of industrial history, and the fact that the accident had never been corrected in three decades of post-Soviet globalization tells you something about how supply chains actually work: nobody fixes a single point of failure until it fails.

What the gases do

Neon, krypton, and xenon are noble gases — chemically inert elements that don’t react with other materials, which is precisely what makes them useful in environments where contamination would destroy the product.

Neon’s critical application is semiconductor photolithography. The excimer lasers used to etch circuit patterns onto silicon wafers — the deep ultraviolet (DUV) systems that still produce the majority of the world’s chips — use gas mixtures that are approximately 96% neon, with small amounts of argon, krypton, fluorine, or xenon depending on the wavelength required. ArF (argon-fluorine) lasers at 193 nanometers and KrF (krypton-fluorine) lasers at 248 nanometers are the workhorses of the semiconductor industry. Every fab that runs DUV lithography consumes neon. The gas mixtures degrade during use and must be regularly replaced. TSMC, Samsung, Intel, and every other chipmaker on Earth — including the Chinese fabs the CHIPS Act was designed to compete against — need a continuous supply of ultra-high-purity neon to keep their lasers firing.

Krypton serves double duty. In semiconductor manufacturing, it’s a component of the laser gas mixtures. Outside the fab, krypton fills the gap between panes in energy-efficient triple-glazed windows — a growing market as building energy codes tighten globally. It’s also used in high-intensity lighting for airports and stadium illumination.

Xenon has the broadest application portfolio of the three. It’s an anesthetic in medicine — safer than nitrous oxide, with faster recovery times, though dramatically more expensive. It fills the flash tubes in high-end photography equipment. It’s used as a contrast agent in CT imaging. And — increasingly — it fuels the ion propulsion systems on communications satellites and Earth observation spacecraft. SpaceX’s Starlink constellation and Amazon’s Project Kuiper are driving xenon demand as satellite constellations proliferate. When a Starlink satellite adjusts its orbit, it’s expelling ionized xenon. The space economy’s growth curve is, unexpectedly, a noble gas demand curve.

Why Ukraine had 70% of global neon

The answer is Soviet military planning. During the 1970s and 1980s, the Soviet Union treated neon as a strategic material for high-powered laser weapons research — the kind of Cold War physics that the Battlefields of the Future course covers from the other side. Every major air separation unit in the Soviet Union was equipped with neon, krypton, and xenon enrichment facilities. Air separation units produce oxygen — which steel mills need in enormous volumes — and the noble gases are captured as by-products of the oxygen production process. The Soviet Union had massive steel mills. The massive steel mills had massive air separation units. The massive air separation units captured massive quantities of noble gases. When the Soviet Union collapsed, the steel mills ended up in Ukraine — particularly in the industrial cities of the Donbas and Black Sea coast — and the noble gas capture equipment went with them.

For three decades, Ukrainian companies collected these gases, purified them to semiconductor grade (99.999% purity for neon), and exported them to the global chip industry at prices that made building competing production capacity uneconomical anywhere else. The same by-product supply structure that constrains indium and tellurium applies here: neon is a by-product of oxygen production, which is a by-product of steelmaking. You cannot produce more semiconductor-grade neon without operating air separation units at steel mills, and the economics of operating those units are determined by steel demand, not neon demand. Ukraine’s dominance wasn’t because Ukrainian neon was better. It was because Ukrainian steel mills had the gas capture equipment installed, nobody else had bothered to install it, and the resulting supply was cheap enough to discourage competition.

What happened after the shock

The predicted catastrophe — fabs shutting down, chip shortages deepening, economic disaster — largely didn’t materialize. The semiconductor industry responded faster than most analysts expected, for several reasons.

First, the major chipmakers had prepared. After neon prices spiked 600% during the 2014 Crimean annexation, TSMC, Samsung, and others diversified suppliers and built strategic stockpiles. Most large fabs had 3-6 months of gas reserves when the 2022 invasion began.

Second, recycling technology scaled rapidly. Modern DUV scanners can recover and purify over 90% of the neon used in each laser pulse, dramatically reducing virgin neon consumption per wafer. TSMC’s neon recycling program became a model for the industry.

Third, new production came online. Linde had invested $250 million in a neon production facility in La Porte, Texas, after the 2014 scare. Chinese air separation companies expanded noble gas capture. South Korean and Japanese producers increased output. By 2023, the acute shortage had eased. Prices retreated from their peaks. The industry congratulated itself on resilience.

Fourth — and this is the detail that changes the long-term picture — the technology is shifting. ASML’s extreme ultraviolet (EUV) lithography systems, which are required for the most advanced 5-nanometer and 3-nanometer chips, do not use neon. EUV lasers vaporize tin droplets rather than exciting noble gas mixtures. As EUV adoption expands and DUV’s share of leading-edge production declines, neon demand from the semiconductor industry will structurally decrease. The gas that nearly crippled the chip industry in 2022 may become less critical to the chip industry by 2030 — not because the supply chain was fixed, but because the technology moved on.

Where it stands in 2026

The noble gas market in 2026 is more diversified than 2022 but still structurally fragile. Ukrainian production has partially recovered — Cryoin’s Odessa facility has resumed operations, though at reduced capacity, and the Mariupol facilities remain destroyed. China, Japan, South Korea, and the United States have all expanded noble gas production and purification capacity. The acute price crisis is over.

But the underlying architecture hasn’t fundamentally changed. Noble gases remain by-products of air separation at steel mills and industrial gas plants. The decision to capture them — rather than venting them into the atmosphere — is discretionary, driven by the economics of the gas market relative to the cost of operating the capture equipment. When neon was $100 per liter, everyone captured it. At lower prices, the incentive weakens. The antimony supply chain showed that price normalization after a crisis doesn’t mean the structural vulnerability has been resolved — it means the market has priced in the assumption that the crisis won’t recur.

Xenon faces its own emerging constraint. Satellite constellation demand is growing faster than xenon supply. SpaceX’s Starlink alone operates over 6,000 satellites, each requiring xenon for station-keeping maneuvers. Amazon’s Kuiper constellation will add thousands more. If the space economy’s xenon demand outgrows the industrial gas industry’s xenon capture, the same by-product ceiling that constrains indium, tellurium, and iridium will constrain the propellant supply for the satellite industry. SpaceX has already begun testing krypton as a cheaper, more abundant xenon substitute in some Starlink applications — a substitution that trades performance for supply security, and that shifts demand pressure from one noble gas to another rather than relieving it.

Why they share a lecture

Neon, krypton, and xenon are the Rare Earth Elements course’s case study in accidental concentration — the supply chain vulnerability that exists not because of geological scarcity or deliberate resource nationalism, but because of industrial inertia. Nobody cornered the noble gas market. Nobody imposed export controls. The Soviet Union installed gas capture equipment at steel mills for laser weapons research. The equipment ended up in Ukraine. Ukraine supplied the world for thirty years. Then a war started and the supply vanished overnight.

The nickel case is about deliberate resource nationalism — Indonesia’s export ban was a strategic decision. The gallium/germanium and antimony cases are about deliberate export controls — China’s licensing regime is an instrument of state policy. The noble gas case is about none of those things. It’s about a supply chain that concentrated by accident, stayed concentrated through inertia, and broke because of a war that had nothing to do with semiconductors. That’s a different category of supply chain risk — one that no critical minerals policy is designed to prevent, because it’s not the result of any policy at all. It’s the result of nobody looking at the map and asking what happens when the cheapest supplier is in a country that borders Russia.

This is the kind of supply chain our Rare Earth Elements course was built to map — where the gases that power every chip laser on Earth were by-products of Soviet steel mills repurposed for Cold War laser weapons, concentrated in two cities in a war zone, and the industry that needed them only found out when the bombs started falling.

There is a category of critical mineral whose supply cannot be increased by building more mines, raising the price, or passing legislation — because the mineral is not what anyone is mining for. Tellurium is a by-product of copper refining. Indium is a by-product of zinc smelting. Neither has a primary mine anywhere on Earth. When the world needs more tellurium, it needs more copper refineries to recover tellurium from the anode slime left over after electrolytic copper purification. When the world needs more indium, it needs more zinc smelters processing indium-bearing zinc ores and choosing to install the additional recovery circuits required to capture the indium rather than letting it wash into the waste stream. In both cases, the decision to produce more of the by-product is made by an operator whose business model is the primary metal — and whose investment decisions, expansion timelines, and operational priorities are governed by the economics of copper or zinc, not the economics of indium or tellurium. The by-product supply ceiling is the hardest constraint in the critical minerals supply chain to solve, because it doesn’t respond to any of the normal market signals. You can’t mine what doesn’t have a mine.

This matters now because the two fastest-growing applications for indium and tellurium are both critical to the energy transition — and both are scaling into a supply structure that physically cannot scale with them.

Indium: the element on every screen

Global indium production was approximately 900 metric tons in 2023, with China producing roughly 60%, South Korea 12%, and Japan 8%. Indium’s dominant application — over 50% of global demand — is indium tin oxide, a transparent conductive film deposited on glass or plastic substrates. ITO coats the touchscreen on every smartphone, every tablet, every laptop, every ATM, every airline check-in kiosk, every Tesla center console, and every flat-panel display manufactured in the last two decades. When you swipe your finger across a screen, you are interacting with a layer of indium tin oxide roughly 200 nanometers thick. The combination of electrical conductivity and optical transparency that ITO provides has no commercially viable substitute at the price and performance level the display industry requires.

The second major application is CIGS — copper indium gallium selenide — thin-film solar cells. CIGS panels are lighter, more flexible, and perform better in low-light and high-temperature conditions than conventional crystalline silicon panels, making them attractive for building-integrated photovoltaics, curved surfaces, and military applications. The CIGS market is small relative to silicon — less than 2% of global indium demand currently goes to solar — but the technology is one of three thin-film architectures (alongside CdTe and perovskites) competing for market share in applications where rigid silicon panels don’t fit. If CIGS deployment scales with the broader solar buildout, indium demand from that sector alone could double or triple within a decade.

The by-product constraint is the ceiling. Indium is recovered from the residues of zinc smelting — specifically from the zinc sulfide ores that happen to contain indium at concentrations of 1 to 100 parts per million. Not all zinc ores contain indium. Not all zinc smelters have installed recovery circuits. The decision to install a recovery circuit — which requires additional capital expenditure and process complexity — is made by a zinc smelter operator whose primary revenue comes from zinc. If zinc prices are low and indium prices are high, the smelter might invest in recovery. If zinc prices are high, the smelter has no incentive to complicate its operation for a by-product that contributes a small fraction of total revenue. The production ceiling for indium is set by the intersection of zinc ore geology, zinc smelter economics, and the discretionary decision of zinc operators to capture a by-product they are not required to capture. That’s not a supply chain. That’s a side hustle with a geological asterisk.

China’s 60% share of global indium refining creates the same concentration risk the Rare Earth Elements course has documented for gallium, graphite, antimony, and lithium refining. The gallium post already covered the mechanism: China’s 2023 export controls on gallium and germanium demonstrated that by-product metals refined primarily in China can be restricted through the same licensing regime Beijing has applied to every subsequent mineral. Indium has not been restricted. The infrastructure for restricting it is identical to the infrastructure that restricted gallium.

Tellurium: the element inside America’s solar bet

Tellurium’s story is simpler and stranger. Global production in 2023 was approximately 640 metric tons — roughly two-thirds the volume of indium and measured in quantities so small that industry analysts note the actual available supply may be “significantly higher” than official figures because copper refiners don’t always track or report tellurium recovery. Tellurium is extracted from the anode slime that accumulates during electrolytic copper refining — a residue that also contains selenium, gold, silver, and platinum group metals. Over 78% of tellurium extraction occurs in three countries: China, Japan, and Canada. The United States has two electrolytic copper refineries — one in Texas, one in Utah — that produce copper telluride from tellurium-bearing anode slimes. That’s it. Two facilities, producing a fraction of domestic demand.

Tellurium’s critical application is cadmium telluride solar cells — CdTe panels — manufactured almost exclusively by one company: First Solar, headquartered in Tempe, Arizona. First Solar is the largest solar manufacturer in the Western hemisphere and the only major solar company that does not use crystalline silicon. CdTe panels currently represent 21% of the U.S. solar market and 4% of the global market. First Solar’s domestic production capacity is set to reach 14 gigawatts by 2026, driven by the Inflation Reduction Act’s manufacturing incentives. The company is building or expanding factories in Ohio, Alabama, and Louisiana. The entire strategic bet — reshoring American solar manufacturing away from Chinese silicon supply chains — depends on a thin-film technology whose active ingredient is a by-product of copper refining produced at roughly 640 metric tons per year globally.

The Department of Energy’s perspective paper on CdTe photovoltaics states the constraint plainly: tellurium’s “constrained availability may place a practical limit on the maximum size of the CdTe PV supply chain.” The limit hasn’t been reached yet. But the industry roadmap targeting 100 gigawatts of CdTe manufacturing by 2030 requires tellurium supply to roughly triple from current levels, and the only way to triple tellurium supply is to either triple the number of copper refineries recovering tellurium from anode slime — an investment decision made by copper companies for copper reasons — or to dramatically improve the recovery rate at existing refineries, most of which were not designed to optimize tellurium extraction because tellurium was never what they were built to produce.

The copper shortage documented elsewhere in this cluster creates a compounding irony: the energy transition needs more copper for wiring, grid infrastructure, and EV motors. It also needs the tellurium that comes out of copper refining as a by-product. But copper mines are not copper refineries. New copper mines in Chile and Peru ship concentrate to smelters in China — and Chinese smelters are not obligated to supply tellurium to American CdTe solar manufacturers. The supply chain for America’s silicon-free solar bet runs through the same Chinese refining infrastructure that the policy was designed to avoid.

The by-product problem across the course

Indium and tellurium are not the only by-product metals in the Rare Earth Elements course with this structural constraint. Platinum group metals include iridium — produced at 7-8 tonnes per year exclusively as a by-product of platinum mining — whose potential scarcity could bottleneck the entire hydrogen electrolyzer industry. Germanium, covered in the gallium/germanium post, is a by-product of zinc smelting, just like indium, and faces the same structural ceiling. Cobalt is predominantly a by-product of copper and nickel mining — the conflict minerals post documented the DRC’s artisanal mining as the exception to by-product dependency, not the rule.

The pattern is consistent: by-product metals cannot be produced independently of their host metals. Their supply responds to the economics of copper, zinc, nickel, or platinum — not to the economics of indium, tellurium, germanium, cobalt, or iridium. When the energy transition creates demand for these by-products that outpaces the growth rate of their host metal industries, the result is a supply ceiling that no amount of investment in the by-product itself can raise. The ceiling can only be raised by expanding host-metal production — which requires mines that take 7-10 years to permit and build, serving a market (copper, zinc, nickel) whose economics may not justify the expansion at any given moment. The lithium supply chain at least has the theoretical advantage that lithium is the primary product: if you need more lithium, you build a lithium mine. If you need more tellurium, you build a copper refinery and hope the anode slime contains enough tellurium to matter.

Why they share a lecture

Indium and tellurium are paired in the Rare Earth Elements course because they are the clearest illustration of the by-product supply ceiling — the constraint that separates critical minerals whose production can theoretically respond to demand from critical minerals whose production cannot. The vanadium supply chain is concentrated but primary — if vanadium prices rise, someone can open a vanadium mine. The antimony supply chain is concentrated and primary. The semiconductor supply chain is concentrated but can, in theory, be duplicated through fab construction. Indium and tellurium cannot be duplicated. They can only be recovered from processes designed to produce something else, at rates determined by someone else’s business model, from geological deposits whose by-product content was never the reason the deposit was developed.

This is the kind of supply chain our Rare Earth Elements course was built to map — where the touchscreen industry runs on a layer of indium 200 nanometers thick recovered from zinc smelter residues, America’s silicon-free solar strategy depends on 640 metric tons of tellurium recovered from copper refinery anode slime, and neither supply chain can be expanded by investing in the thing you actually need more of.