Tungsten mine opens in Korea as US seeks important non-Chinese minerals

BEIJING — China will begin limiting exports of the important mineral tungsten this weekend, just as alternatives are reopening to Chinese suppliers of the metal.

It's the opposite of what happened in previous decades, where Chinese companies, according to analysts, pumped 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 limiting exports of “dual-use” goods – which can be used for military or civilian purposes – China's Ministry of Commerce earlier this month issued a list indicating that companies wishing to export a range of tungsten products and important metals will need to provide Application for licenses. The latest measures will take effect on December 1.

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

“It is a bit too 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. “The thing that will stimulate more tungsten is not a Chinese ban. It's a Chinese ban that causes tungsten mining to become more profitable.”

Ecclestone pointed out that tungsten prices did not react much to China's announcement. For mining of the metal to be significantly profitable, he estimates prices would need to trade $50 above their current price of about $335 — measured by the industry in units of metric tons of ammonium para tungstate, where a metric ton is 10 kilograms.

It is possible that higher prices in the United States alone will encourage more tungsten production.

While China restricts tungsten exports, the United States increased tariffs on Chinese tungsten by 25% in September. The majority of public comments on US tungsten tariffs supported the tariffs, citing benefits to domestic manufacturing. Some even demanded that fees be raised to 50%.

Colin S. said: Hendricks, a senior fellow at the Peterson Institute for International Economics, said it could take years to open a mine, but more tariffs, expected under the Trump administration, could make reopening some U.S. mining projects “more commercially viable.” .

The United States has not mined tungsten commercially since 2015, according to official records. But this year, one of the world's largest metal mines is close to resuming production in South Korea.

Based in Canada Almonte Industries It said last week it was one step closer to fully reopening its Sangdong mine and processing plant by installing grinding equipment. The mine, located more than 10 hours east of Seoul by bus, was closed in 1994.

Almonte aims to return Sangdong to about 50% of its potential production by the summer of 2025, CEO Lewis Black told CNBC last month, after a ceremony that highlighted cooperation with the local government.

He pointed out that 90% of the tungsten produced by South Korea comes from China, and that Chinese companies may invest in other businesses to maintain their market share indirectly.

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

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

“In the medium term, the United States will need to rely on friendship” regarding tungsten, said Gracelyn Bhaskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. She noted that Almonte pledged to deliver 45% of the Sangdong mine in South Korea to the United States through 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 US tungsten imports in June, at 45%, according to the agency.

Demand for tungsten is expected to rise both inside and outside China, keeping tungsten prices high in the near term, said Emre Uzun, a ferroalloy and steel analyst at Fastmarkets. But he expects, starting late next year, that 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, referring to Sangdong and tungsten mine projects in Kazakhstan, Australia and Spain.

Although there is little tungsten production in the United States, the US Geological Survey has identified about 100 sites in 12 US states that contain significant amounts of the mineral: Alaska, Arizona, California, Colorado, Idaho, Montana, North Carolina, New Mexico, and Nevada. Texas, Utah, and Washington.

And in Idaho, about four hours from Boise, a small Canadian company called Demesne Resources plans in the coming days to close an eight-year, $5.8 million deal to acquire the IMA tungsten mine, CEO Murray Nye said Tuesday. The mine is expected to begin production by spring.

Nye said decades of historical records indicate the mine contains significant amounts of tungsten, silver and molybdenum, a metal often used to strengthen other metals. This has what he expects to be a “nice and profitable mine,” he said.