The world of tungsten, a critical metal known for its hardness and indispensable in sectors such as defense and technology, is undergoing significant changes. As of December 1, 2023, China will initiate restrictions on the export of tungsten, marking a strategic pivot after decades of dominating the market with low-cost supplies. Historically, China’s vast resources and competitive pricing strategies allowed it to secure a staggering 80% of the global tungsten supply chain. This new legislation seems to be a response to rising geopolitical tensions and the emerging need for alternate supply sources, particularly from countries like the U.S., which have become increasingly wary of reliance on Chinese materials.
Despite the anticipated impact of these export restrictions, the market’s response to the announcement has been relatively muted. Current tungsten prices hover around $335 per metric ton of ammonium paratungstate, a figure that is still not particularly enticing for miners, according to industry analyst Christopher Ecclestone. He argues that a price increase of at least $50 per ton would be essential to stimulate substantial mining activities. As the U.S. Pentagon has already indicated plans to cut off contracts involving China-sourced tungsten by 2027, the urgency for alternative sources has prevailed over immediate supply disruptions.
The U.S. government has also taken action to bolster its defense by raising tariffs on imported tungsten from China by 25%. These tariffs have garnered public support, particularly among domestic manufacturers who see this as a necessary step to revitalize the local industry. Such measures could encourage existing mining operations, which have been largely dormant since 2015, to reconsider their positions and potentially resume production. The Trump administration’s focus on increasing tariffs could add further commercial viability to U.S. mining projects that had been cast aside due to unfavorable economic conditions.
Within this context, companies like Almonty Industries are actively pursuing the revival of tungsten production. The Southern Korean Sangdong mine, which has been closed since 1994, is set to resume operations with the goal of reaching 50% of its potential output by 2025. The mine’s reopening exemplifies the critical role that international cooperation—and in particular, U.S. interests in South Korea—plays in fostering a more diverse tungsten supply landscape.
In addition to the U.S. reinvesting in domestic tungsten production, South Korea is making significant strides in establishing itself as an alternative supplier. Almonty Industries’ plans to re-open the Sangdong mine not only promise to create local jobs but also aim to fortify the country’s economic resilience amidst China’s current market share. With 90% of its tungsten currently imported from China, South Korea’s mining efforts could act as a vital alternative for U.S. industries. Furthermore, local government incentives are being developed to attract foreign investments in mining operations, underscoring the strategic importance of tungsten beyond simply economic factors.
These developments resonate within the broader context of “friendshoring,” a term increasingly used to describe the strategy of sourcing materials from geopolitical allies rather than relying on traditional suppliers. Gracelin Baskaran from the Center for Strategic and International Studies highlights the importance of establishing this cooperative framework, noting Almonty’s commitment to supplying 45% of the South Korean output to the U.S. This interconnectedness could lead to stronger, more sustainable supply chains that promote economic security.
Analyst Emre Uzun forecasts that while demand for tungsten is poised to rise, it will be accompanied by an expected influx of non-Chinese supply sources from across the globe. Projects in regions such as Kazakhstan, Australia, and Spain, alongside domestic initiatives, hint at a diversifying market. The U.S. Geological Survey has identified numerous potential mining sites within America, indicating that the capacity for domestic tungsten mining exists and might soon be realized.
The impending challenges presented by China’s export policies, coupled with shifting global dynamics, could create a unique opportunity for innovation in tungsten mining and production. Companies are preparing to seize this moment, which may well redefine the supply landscape for tungsten. This may lead not only to stabilizing prices but also to fostering a more competitive, resilient market for this critical metal.
The journey ahead is complex, but the convergence of policy changes, market dynamics, and regional collaborations points towards a more sustainable tungsten future—one that reduces dependency on single suppliers and embraces broader, more strategic approaches to resource management. While there are hurdles to overcome, they will likely spur innovation and investment in sectors poised to benefit from tungsten’s vital role in modern technology and defense.