Tungsten producers in developed countries, especially those tied to the defence sector, are facing urgent supply chain disruptions after China abruptly halted exports of the critical metal. The move follows Beijing’s February 4 decision to include tungsten among five strategic industrial metals now subject to export restrictions, alongside retaliatory tariffs against U.S. imports. Export permits have not been granted since then, causing panic across industries that have relied on Chinese tungsten for over three decades, according to Lewis Black, CEO of Canada-based Almonty Industries.
Black emphasized that the industry is struggling, with some customers even requesting tungsten recovery from mine tailings to continue production. Compounding the challenge, U.S. defence contractors must cease all use of Chinese tungsten by January 1, 2027, in compliance with national security regulations.
Tungsten is prized for its exceptional hardness and the highest melting point on the periodic table at 3,422°C. Its applications span from drill bits and heavy machinery to armour-piercing ammunition and solar panel manufacturing. Despite its significance, the U.S. has not commercially mined tungsten for over a decade. China dominates the global market, producing 82.7% of raw tungsten ore in 2023. Other contributors include Vietnam (4.2%), Russia (2.5%), and North Korea (2%).
Almonty Industries owns the world’s oldest tungsten mine in Portugal and has been preparing for the commercial reopening of the Sangdong mine in South Korea, once the largest global source of tungsten. After ten years of preparation, including four years of redesign for environmental compliance, Sangdong is set to resume operations within two months. The mine is expected to produce 2,800 tonnes annually, with plans to double output to 5,600 tonnes, representing around 30% of global output excluding China.
Black noted that China has become a net importer of tungsten ore, as several domestic mines have closed in recent years. If current export controls persist, many foreign tungsten product manufacturers with thin profit margins could face closure. He argued that this is a subtle strategy for China to maintain control of the supply chain, as global buyers will increasingly rely on Chinese downstream products, which are competitive in both quality and price.
Tungsten prices have already begun to rise, with ammonium paratungstate reaching $39,000 per tonne on May 2, the highest since 2012. Prices are expected to surge further, mirroring recent trends seen in other restricted metals like antimony. Despite the possibility of relaxed tensions, Black believes that strategic diversification of supply is now inevitable.
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