China’s indium chokehold prompts moves by ASX explorers to fill supply gap
Indium is rapidly landing on exploration hit-lists, with ASX companies pushing to uncover deposits capable of supporting an alternate supply chain.
Policy support for critical minerals including indium is growing, with $135m injected into Nyrstar to strengthen domestic processing and diversify supply
China, South Korea and Japan lead global indium output, while Australia has no local production
A growing field of ASX explorers are ramping up efforts to identify mineable indium using multiple exploration techniques
China’s decision in February 2025 to place export controls on indium, tungsten, tellurium, bismuth and molybdenum poured fuel on a fire that’s been burning since 2010.
Beijing first halted rare earth shipments to Japan 15 years ago during a territorial dispute, a moment that exposed how vulnerable global supply chains really were.
As a result, NdPr prices skyrocketed, and ASX stocks followed suit, with pre-production Lynas (ASX:LYC) jumping from a $700m market cap to a peak of ~$4.2bn in 2011.
In the years that followed, China introduced further licensing and export restrictions across a growing list of critical minerals, beginning with gallium and germanium in mid-2023 and expanding steadily since.
Western governments have long understood the risks of relying so heavily on China for materials central to defence, clean energy and advanced technology.
But despite the warnings, meaningful progress in building alternative supply chains has been painfully slow.
In 2024, China was still the world’s largest refinery producer of indium, accounting for an estimated 760 tonnes and 70% of the global total for that year.
Governments are now starting to step in, including in Australia as it aims to become a major player in the global shift towards critical minerals processing even as the sector remains under pressure from high power and labour costs, with China’s oversupply weighing on prices.
Back in August, the Albanese government – alongside the South Australian and Tasmanian governments – committed to an A$135m funding package in support for Trafigura-owned Nyrstar.
The funding enabled Nyrstar to maintain its operations while fast-tracking plans to rebuild its Port Pirie lead smelter and zinc processing facilities in Hobart.
The global multi-metals producer also aims to explore the production of other critical minerals such as antimony, bismuth, germanium and indium after Nyrstar placed both smelters under strategic review earlier this year.
Australia eyes future indium production
Indium has historically been treated as a minor by-product rather than a standalone commodity.
Its production is dependent on zinc and polymetallic smelting, and if smelters start optimising recovery, it implies industry acknowledgement that global supply is too concentrated and new streams outside China are necessary.
Indium’s biggest use is in flat panel displays – TVs, smartphones, tablets and touchscreens – where it’s combined with tin to produce indium tin oxide (ITO), a material prized for being transparent and electrically conductive.
It also plays a role in solar panels, semiconductors and LED technology, and is used as a hardening ingredient in aircraft engine bearings, as well as in low melting alloys for specialist solders and safety triggers, including fire sprinkler systems.
South Korea trails China as the second biggest indium producer followed by Japan, while Australia is a net importer of the metal, with no dedicated production and most supply coming from China.
But that may change, with reprocessing of legacy tailings and new exploration targets hinting at future supply.
Indium hunt intensifies for Octava
Companies like Octava Minerals (ASX:OCT) are working hard at finding commercial amounts of indium by using a range of exploration techniques.
The explorer recently completed a FLEM geophysical survey across its Federation project in Tasmania, uncovering 860ppm indium in re-assays of rock chips from historical workings at the Sweeney's prospect.
These results followed an earlier sampling program, which returned extremely high grades of indium (>500ppm) along with copper, zinc, silver and tin.
OCT managing director Bevan Wakelam told Stockhead the indium grades were so high they went over the limits of the laboratory.
It is now setting out to drill Sweeney's with a diamond rig mobilising to site.
“Drilling at Sweeney’s will be targeting the expansion of known mineralisation recorded in the historical drilling and will also target the sulphide feeder zone below that remains open at depth and along strike,” Wakelam said.
“The assay results for this drilling will likely become available early in the new year and after that, we hope to be in a position to put some tonnages around the high grades that have already been discovered.”
At the same time, planning is underway for an airborne electromagnetic (EM) survey to kick off early next year as a base metal sulphide target technique where EM hasn’t been used before.
From Wakelam’s point of view, indium’s demand will only increase with the rapid rise of emerging middle classes in emerging economies, such as China and India.
“As we have seen in other critical minerals markets, having one dominant global player controlling much of what is available for export, creates a market imbalance and increased supply risk,” he said.
“Octava sees this as a great opportunity for Australian companies to become the alternative, stable suppliers of indium.”
ASX explorers stepping up
In Queensland, Iltani Resources (ASX:ILT) is developing the Orient silver-indium asset near Herberton in the state's north, where diamond drilling recently delivered indium grades up to 174.1g/t as well as 805g/t silver, 20.73% lead and 10.35% zinc.
Orient is a large-scale silver-rich epithermal system, extending over at least 6km2 with high-grade sulphide veins surrounded by extensive lower-grade zones up to 100m thick.
It boasts a maiden resource of 34.2Mt at 110g/t silver equivalent plus an exploration target 16-19 Mt at 95-117g/t AgEq.
The key economic minerals are silver-rich galena (lead sulphide), and indium-rich sphalerite (zinc sulphide).
Iltani attracted $8m in funding from the Queensland Investment Corporation’s Critical Minerals and Battery Technology Fund in October to fast-track development at Orient and, according to Blue Ocean analyst Carlos Crowely Vazquez, it is the largest silver-indium deposit in Australia.
American West Metals (ASX:AW1) doubled in value to a high of 9.8c after reeling in $7m via a placement to rapidly advance the West Desert project in Utah, which hosts America’s largest and highest-grade indium deposit.
The project hosts a resource of ~33.7Mt grading 3.83% Zn, 0.15% copper and 9.08g/t Ag, including 27.3Mt in the indicated category, with further upside from gallium and molybdenum which are yet to be added to the resource.
With funding secured and permits in place, AW1 can charge ahead with drilling of follow-up targets for indium, gallium, silver and other critical metals, supported by a US policy backdrop heavily focused on reshoring supply chains.
This makes available government grants, low-interest loans and price floor commitments to support domestic production and AW1 is engaging with US agencies to potentially access these funding mechanisms.
“With only 10% of the project area explored with drilling and with gallium and molybdenum not yet included in the JORC resource, there is outstanding potential for resource growth and value creation,” AW1 managing director Dave O’Neill said.
“Work has begun to exploit this immediate opportunity with drill permitting in place. The mineralisation remains open along the 2.5km mine corridor, and walk-up drill targets are being defined for our follow-up drilling program.”
At Stockhead, we tell it like it is. While Octava Minerals, Iltani Resources and American West Metals are Stockhead advertisers, they did not sponsor this article.
Originally published as China’s indium chokehold prompts moves by ASX explorers to fill supply gap
