China’s antimony export controls are throwing the tungsten industry into turmoil

BEIJING – China’s latest export controls have insiders of the crucial minerals industry in turmoil, with some concerned that Beijing will leverage its dominant position in the global supply chain in unprecedented ways.

The Chinese Ministry of Commerce announced this on Thursday export controls on antimony would come into effect on September 15. Antimony is used in bullets, the production of nuclear weapons and lead-acid batteries. It can also strengthen other metals.

“Three months ago that was impossible [any] you would think they would have done this. It’s quite confronting in that regard,” Lewis Black, CEO of Canada-based Almonty Industries, said in a telephone interview. The company has said it is spending at least $125 million to reopen a tungsten mine in South Korea later this year.

Tungsten is almost as hard as diamond and is used in weapons, semiconductors and industrial cutting machines. Both tungsten and antimony are on the U.S. List of Critical Minerals and are within 10 elements of each other on the periodic table.

“My industry now thinks this hits a lot closer to home than graphite,” Black said, referring to previous Chinese export controls. Last year Beijing, the world’s largest graphite producer, said it would enforce export licenses for the crucial battery material, amid criticism from foreign countries concerned about its dominance.

“I can’t explain this move and I think that’s what threw a lot of people in this industry, my customers, into turmoil. They don’t have a plan B, which China is very aware of. There hasn’t been a plan for 30 years B more.” years,” he said.

“There has always been a balance… they were never armed because they could create a snowball of escalation,” he said.

China was responsible 48% of global production from antimony mines in 2023, while the US is not mining any marketable antimony, according to the US Geological Survey’s latest annual report. The US has not conducted commercial tungsten mining since 2015 and China dominates global tungsten supply, the report said.

“I think this is the beginning of some export restrictions on some rare earths and minerals,” Tony Adock, executive chairman of Tungsten Metals Group, said in a telephone interview. He said he found it hard to believe that China would only restrict antimony.

“The way the [Chinese Commerce Ministry] statement was written, we extrapolated that to tungsten and other rare earth metals. It may not happen,” Adock said, noting that “tungsten is probably of the greatest economic importance.”

China’s Ministry of Commerce did not immediately respond to a request for comment.

The US has sought to restrict China’s access to high-end semiconductors, after which Beijing announced export controls on germanium and gallium, two metals used in chip production.

While tungsten is also used to make semiconductors, the metal, like antimony, is used in defense production.

“China is experiencing declining tungsten production, but tungsten is absolutely essential, far more important than antimony, for military applications,” said Christopher Ecclestone, director and mining strategist at Hallgarten & Company.

He expects China to implement export controls on tungsten by the end of the year, if not within a few months.

“During a situation where there is a bit of a race to secure metals in case there is a flare-up of tensions, we are frankly talking about the South China Sea or Taiwan, you want to have as much tungsten as possible,” Ecclestone said . . “But you also want people on the other side to have as little tungsten as you can develop.”

The US already wants to reduce its dependence on China for tungsten.

The American REEshore Act will apply from 2026 bans the use of Chinese tungsten in military equipment. That refers to the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022.

The House Select Committee on Strategic Competition between the United States and the Chinese Communist Party in June announced a new working group on US policy on critical minerals.

Ecclestone said the antimony trading niche market noticed last week that the US price for buying the metal from Rotterdam was exponentially higher than the price for delivery from Shanghai. That’s after antimony prices continued to rise even after pandemic-related shipping disruptions ended, he said.

“There is a suspicion that the Pentagon has replenished its reserves with certain metals, and in particular antimony, because it needs antimony for ammunition,” said Ecclestone, who founded the mining strategy company in 2003.

The US Department of Defense did not immediately respond to a request for comment.

China is acting more in retaliation “against what it perceives as an infringement on its national interests,” Markus Herrmann Chen, co-founder and director of China Macro Group, said in an email.

He pointed out that China’s Third Plenum Meeting of Policymakers in July “put forward a completely new policy goal of better coordination of the entire mineral value chain, which is likely to further increase the supply-side importance of ‘strategic mineral resources’ for both business and geo- reflects economic interests.”

As China tries to safeguard its national security, companies in the US and elsewhere are looking to tap into a new opportunity.

“Energy Fuels has been the largest supplier of uranium oxide to the U.S. for many years and supports domestic nuclear energy production,” Mark Chalmers, president and CEO of Colorado-based Energy Fuels, said in a statement. He said the company is creating a U.S. rare earth product line.

“We recognized that our 40 years of expertise in naturally radioactive materials gives us a competitive advantage to duplicate China’s success in separating multiple countries. [rare earth elements] of cheap and plentiful monazite” said Chalmers, referring to a mineral from which the desired metals can be extracted.

It remains unclear whether China will proceed with a blanket implementation of the latest export controls.

“They don’t want to acknowledge that this could escalate,” Black said. ‘But I also don’t think China wants this to escalate. The last thing you want to create is another bogeyman. [at] the start of an American election. Let’s see in a week whether this is real policy or not.”