Tungsten, known for its hardness and high energy density, plays a crucial role in various industries, including weapons, autos, electric car batteries, semiconductors, and industrial cutting machines. While China dominates the supply chain for many critical minerals, it has not imposed sweeping restrictions on tungsten, unlike other materials. This has made tungsten a diplomatic metal that has not sparked significant tensions in the international trade arena.
The Biden administration recently raised tariffs on tungsten imports, but China did not include the metal in new regulations for boosting oversight of domestic rare earths production. The Chinese government chose to ignore the new tariffs, signaling a desire to avoid escalating tensions with the U.S. While China has reduced national production quotas for tungsten mines due to environmental restrictions, opportunities for non-Chinese suppliers like Almonty Industries are growing.
Global Efforts for Diversification
As countries seek to reduce their reliance on Chinese tungsten, efforts to establish a China-free supply chain are gaining momentum. The U.S. REEShore Act and the European Commission’s extended tariffs on Chinese tungsten carbide reflect a shift towards promoting domestic production and sourcing from other regions. Almonty Industries’ forthcoming mine in South Korea aims to contribute significantly to the world’s ex-China tungsten supply, providing an alternative to Chinese dominance.
Expectations of higher demand and limited tungsten supplies have driven prices to multi-year highs, although recent fluctuations have been observed. The U.S. Bureau of Industry and Security at the Department of Commerce faces challenges as the U.S. transitions from being a net seller to a buyer of tungsten, with limited domestic production capacity. Non-Chinese companies are exploring opportunities in South Korea and other regions to establish a more diversified tungsten supply chain.
Opportunities and Challenges for Future Development
While China’s dominance in the global tungsten supply chain is significant, efforts to establish alternative sources outside China are underway. Projects like the Sangdong mine in South Korea and initiatives in other countries present opportunities for diversification and reducing dependence on Chinese supply. The potential for future U.S. supply of tungsten from overseas sources highlights the need for strategic planning and investment in critical mineral production.
Overall, while China’s control over the tungsten market remains strong, recent developments indicate a shifting landscape with growing opportunities for non-Chinese suppliers. As countries aim to secure their critical mineral supply chains and reduce reliance on a single dominant player, the future of the global tungsten industry is set to undergo significant changes, presenting both challenges and opportunities for stakeholders across the supply chain.