Workers transport soil containing rare earth elements for export at a port in Lianyungang, Jiangsu Province, China, on October 31, 2010.
Stringer | Reuters
BEIJING – China will begin restricting exports of the vital metal tungsten starting this weekend as alternatives to Chinese metal suppliers resume.
This is a reversal from previous decades, when Chinese companies poured cheap tungsten into global markets, driving competitors out of business and ultimately controlling 80% of the supply chain, analysts said. Mr. Argus says that there is. Tungsten is an extremely hard metal used in weapons and semiconductors.
As part of new rules restricting the export of “dual-use” goods that can be used for both military and civilian purposes, China’s Ministry of Commerce earlier this month issued a list of requirements for companies wishing to export a variety of tungsten and critical mineral products. announced. To apply for a license. The latest measures will come into effect from December 1st.
The move comes as demand for tungsten from outside China increases due to the escalating conflict between the United States and China. The U.S. Department of Defense has banned contractors from purchasing tungsten mined in China starting January 1, 2027.
“China is a little bit behind the curve when it comes to tungsten,” said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.
“Everyone needs more tungsten. That’s the message going out now,” he said. “It’s not China’s ban that drives further use of tungsten; [it to become more] Mining tungsten is profitable. ”
Ecclestone noted that tungsten prices had not reacted much to the Chinese announcement. He estimates that for mining the metal to become significantly profitable, the price would need to trade $50 higher than the current price of about $335. This price is measured in industry-measured units per tonne of ammonium paratungstate, where one tonne is 10 kilograms.
Higher prices in the U.S. alone could lead to further increases in tungsten production.
While China has restricted tungsten exports, the United States increased tariffs on Chinese-made tungsten by 25% in September. The majority of public comments on the U.S. tungsten tariff supported the tariff and noted benefits to domestic manufacturing. Some called for tariffs to be raised to 50%.
It may take years for mines to open, but additional tariffs expected under the Trump administration could make restarting some U.S. mining projects “more commercially viable,” the company said. said Karen S. Hendricks, senior fellow at the Peterson Institute for International Economics. .
“Friend Shoring” Tungsten
Official records show the United States has not mined tungsten commercially since 2015. But this year, one of the world’s largest metal mines is close to restarting production in South Korea.
Canada-based Almonti Industries announced last week that it is one step closer to fully reopening its Joto mine and processing plant with the installation of grinding equipment. The mine, located more than 10 hours east of Seoul by bus, closed in 1994.
Almonti aims to restore around 50% of Joto’s potential production by summer 2025, CEO Lewis Black said after a ceremony highlighting cooperation with the local government. he told CNBC last month.
He pointed out that 90% of South Korea’s tungsten comes from China, and Chinese companies may indirectly invest in other businesses to maintain market share.
Jeong Kwang-yeol, vice governor of economic affairs in Gangwon City, where Sang-dong is located, hopes the mine will become a hub for other industrial companies to expand into the region, and the area is attracting foreign investors. He said he is ready to provide incentives to the public. He cited estimates that the first phase of the mine would create 250 jobs and 1,500 indirect jobs.
Almonti currently operates a tungsten mine in Portugal. In 2015, the company completed an acquisition that gave it mining rights to Shangdong, and in 2021 secured $75.1 million in project financing from German state-owned bank KfW IPEX Bank. Almonti said the total investment in Kamidong City to date has exceeded $130 million.
Gracelyn Bhaskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies, said of tungsten that “in the medium term the United States will need to rely on friend shoring.” He pointed out that Almonti outsources 45% of South Korea’s Sangdong mine to the United States through long-term supply contracts.
Several members of the U.S. Geological Survey, a government agency that analyzes natural resource availability, visited Sangdong earlier this year to assess its capabilities. According to the agency, China was the largest source of tungsten imports to the United States in June, at 45%.
Emre Uzun, Ferroalloys and Steel Analyst at Fast Markets, said demand for tungsten in China and abroad is expected to increase, and he expects tungsten prices to continue rising in the short term. However, he expects supplies from outside China to increase from the second half of next year, leading to stabilization of raw material tungsten prices.
“Demand will also increase outside of China, but we also expect supply to increase as operations expand and projects progress,” he said, citing the Sandon mine and tungsten projects in Kazakhstan, Australia and Spain as examples. Ta.
Tungsten deposits in the United States
Despite the lack of tungsten production in the United States, the U.S. Geological Survey has determined that tungsten exists in large quantities in 12 U.S. states: Alaska, Arizona, California, Colorado, Idaho, Montana, North Carolina, New Mexico, and Nevada. About 100 locations have been identified. , Texas, Utah, and Washington.
In Idaho, about four hours from Boise, a small Canadian company called Demesne Resources is expected to sign an eight-year deal worth $5.8 million to acquire the IMA tungsten mine in the coming days, officials said. CEO Murray Nye said on Tuesday. He expects the mine to be able to begin production by spring.
Nye said decades of historical records show the mine has significant reserves of tungsten, silver and molybdenum, metals often used to strengthen other metals. said. He said this had the makings of what he expected to be a “great, profitable mine.”
