2 Mining Stocks to Play the Mining Shortage

China controls roughly 99% of the world's primary low-purity gallium production and has put limits on its export since 2023. The metal, crucial for high-end semiconductors, is mainly a byproduct of aluminum (bauxite) and zinc refining. While raw bauxite isn't hard to come by outside of China, there are few places outside of that country that have invested in the expensive process to extract gallium.

This month, prices for gallium are roughly $2,269 per kilogram -- a 141% increase since the start of 2025. This has been compounded by conflict in the Middle East, which disrupted aluminum production (and thus gallium recovery) in places such as Qatar. That has led companies and governments to seek other sources of the metal.

Two mining stocks that could benefit from that trend are Alcoa (NYSE: AA) and Teck Resources (NYSE: TECK). Here are reasons to buy each stock.

Image source: Getty Images.

Alcoa benefits from shifting global supply chains

The need to source aluminum and gallium outside China means that companies are willing to pay a premium for Alcoa's products. Unlike many of its competitors, Alcoa has a vertically integrated supply chain in so-called "safe" locations. It has access to bauxite reserves at seven global mines in Australia, Brazil, Guinea, and Saudi Arabia. The company has seven refineries, six of which are located near key markets on the Atlantic and Pacific coasts.

The Pittsburgh company received $200 million from the Australian government in November, alongside U.S. and Japanese government equity support, for a gallium recovery plant at Alcoa's Wagerup alumina refinery in Western Australia. The project, being worked on with the Sojitz Corporation of Japan, aims to achieve annual gallium production of 100 million tons.

Improved financial health

In the first quarter, Alcoa reported revenue of $3.19 billion, down 7% sequentially. But earnings per share (EPS) doubled over the fourth quarter of 2025, to $1.60. The improvement in profitability is mainly due to the average realized price of aluminum increasing by 12.2% to $4.2 billion per U.S. metric tonne, as the London Metal Exchange price and regional premiums spiked amid Middle East shipping disruptions.

The company is aggressively using its $1.4 billion in cash to improve its financial health. It recently issued a notice to redeem $219 million of high-interest senior notes due in 2028, reducing its debt burden.

The stock is priced right

Alcoa shares trade at slightly more than 9 times forward earnings, a competitive valuation compared to its peers.

The successful restart of Alcoa's San Ciprián smelter in Spain is expected to add significant volume to the aluminum segment. Management said it expects the move to contribute an additional $55 million in earnings in the second quarter alone, driven by increased shipments and lower per-unit costs.

Teck is positioning itself to benefit from the gallium push

Canadian mining company Teck Holdings isn't a gallium producer, but it's positioning itself to own the gallium processing infrastructure that Western governments are currently subsidizing to bypass Chinese supply chains. This toll-booth model for critical minerals reduces Teck's direct mining risk while keeping it at the center of the North American semiconductor supply chain.

The company just sold its Apex germanium, gallium, and copper mine in Utah to Blue Moon Metals (NASDAQ: BMM) while retaining an 8% stake in Blue Moon. Instead, Teck will receive a 0.5% net smelter returns royalty on the property and a capped royalty of $1 million. Blue Moon will process its zinc concentrates, including gallium, at Teck's Trail operations in British Columbia.

Teck is growing revenue and EPS

In 2025, Teck reported revenue of $10.8 billion, up 18.6%, and EPS of $2.84, compared to an EPS loss of $0.90 in 2024. It is in the process of merging with Anglo American, with the new company to be called Anglo Teck. The new company plans to focus on three goals: Keeping mines open longer, expanding processing capacity, and identifying additional copper projects. Teck said the merger, if approved, should deliver annual pre-tax synergies of about $800 million.

In the right place at the right time

China's control over critical minerals has increased their prices. That, in turn, works in favor of companies such as Alcoa and Teck, as it makes it more profitable, in some cases with governmental support, to mine and process critical minerals like copper and gallium.

Both stocks have seen their shares jump more than 70% over the past year as investors realize they are financially healthy and poised to get even healthier.

James Halley has no position in any of the stocks mentioned. The Motley Fool recommends Teck Resources. The Motley Fool has a disclosure policy.