Tungsten mine opens in Korea as US searches for non-Chinese critical minerals

BEIJING – China will begin restricting exports of the crucial metal tungsten this weekend, just as alternatives to Chinese suppliers of the metal reopen.

It’s a reversal from decades past, when analysts say Chinese companies poured cheap tungsten into the global market to drive competitors out of business – ultimately controlling 80% of the supply chain, according to Argus. Tungsten is an extremely hard metal used in weapons and semiconductors.

As part of new rules restricting the export of dual-use goods – which can be used for military or civilian purposes The Chinese Ministry of Commerce released a list earlier this month showing that companies wanting to export a range of tungsten products and essential mineral products must apply for permits. The latest measures come into effect on December 1.

The move comes at a time when escalating tensions between the US and China are driving demand for tungsten outside China. The US Department of Defense has banned its contractors from purchasing tungsten mined in China from January 1, 2027.

“It’s a bit late for the Chinese on tungsten,” said Christopher Ecclestone, director and mining strategist at Hallgarten & Company.

“Everyone needs more tungsten. That’s the message out there right now,” he said. ‘What will lead to more tungsten is not a Chinese ban. It’s a Chinese ban that’s causing it [it to become more] profitable to mine tungsten.”

Ecclestone pointed out that tungsten prices have not reacted much to China’s announcement. For mining the metal to be significantly profitable, he estimates that prices would need to be $50 higher than the current price of about $335 – as measured by the industry in units of ammonium paratungstate per tonnewhere one ton unit is 10 kilograms.

Higher prices in the US alone could boost tungsten production.

As China restricts tungsten exports, the… The US has raised tariffs on Chinese tungsten by 25% in September. The majority of public comments on the U.S. tungsten tariffs supported the tariffs, noting the benefits to domestic production. Some even called for an increase in import duties to 50%.

It may take years to open a mine, but more tariffs expected under the Trump administration could make it more “commercially viable” for some U.S. mining projects to reopen, says Cullen S. Hendrix, a senior fellow at the Peterson Institute for International Economics. .

The US has not conducted any commercial tungsten mining since 2015, according to official data. But this year, one of the world’s largest mines for the metal is nearing the resumption of production in South Korea.

Based in Canada Almonty Industries said last week that the installation of milling equipment brought it one step closer to fully reopening the Sangdong mine and processing plant. The mine, more than ten hours by bus east of Seoul, closed in 1994.

Almonty aims to restore Sangdong to about 50% of its potential output by summer 2025, CEO Lewis Black told CNBC last month, after a ceremony highlighting cooperation with the local government.

He noted that 90% of South Korea’s tungsten comes from China, and that Chinese companies could invest in other companies to indirectly maintain their market share.

Jeong Kwang-yeol, deputy governor for economic affairs in Gangwon, where Sangdong is located, said the region is willing to offer incentives to foreign investors as he hopes the mine can become an anchor for other industrial companies to expand in the region to expand. He cited estimates that the first phase of the mine would create 250 jobs and 1,500 indirect jobs.

Almonty currently operates a tungsten mine in Portugal. In 2015, the company completed an acquisition that gave it the mining rights to Sangdong, and in 2021 it secured $75.1 million in project financing from German state-owned bank KfW IPEX-Bank. Almonty said total investments in Sangdong have exceeded US$130 million so far.

“In the medium term, the US will have to rely on Friendshoring for tungsten,” said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. She noted that Almonty has committed 45% of South Korea’s Sangdong mine to the US under a long-term supply contract.

Several members of the US Geological Survey, a government agency that analyzes the availability of natural resources, visited Sangdong earlier this year to assess its capacity. China was the largest source of U.S. tungsten imports in June according to the agency by 45%.

Demand for tungsten inside and outside China is expected to rise, keeping tungsten prices high in the near term, said Emre Uzun, ferroalloys and steel analyst at Fastmarkets. But from the end of next year, he expects increased supply from outside China will help stabilize raw tungsten prices.

“Outside China, demand will also rise, but supply is expected to grow as operations expand and projects progress,” he said, pointing to the Sangdong mine and tungsten projects in Kazakhstan, Australia and Spain.

Despite the lack of tungsten production in the United States, the US Geological Survey has determined this approximately 100 locations in 12 US states with significant amounts of the metal: Alaska, Arizona, California, Colorado, Idaho, Montana, North Carolina, New Mexico, Nevada, Texas, Utah and Washington.

In Idaho, about a four-hour drive from Boise, a small Canadian company called Demesne Resources plans to close an eight-year, $5.8 million deal in the coming days to acquire the IMA tungsten mine, CEO Murray Nye said Tuesday . He expects the mine to start production in the spring.

Nye said decades of historical data indicate the mine contains significant amounts of tungsten, silver and molybdenum, a metal often used to strengthen others. That, he said, has everything to do with what he expects a “nice, profitable mine” to be.