China's move to control tungsten exports, a key metal for weapons manufacturing and electronics, has sent shockwaves through the global market. Almonty Industries CEO Lewis Black warns that the move is a 'warning shot' and highlights the dependence of the world's economies on China for this crucial resource. The restrictions could lead to price increases and supply chain disruptions, forcing companies to seek alternative sources.
The phone has been ringing off the hook for Lewis Black after China imposed export controls on tungsten, a niche metal mined by his firm that’s crucial to weapons manufacturing. The chief executive officer of North America’s Almonty Industries Inc.
said his customers are in a “state of disbelief” following Beijing’s move on Tuesday, one of a suite of measures announced as a riposte to tariffs placed on Chinese goods by the Trump administration. China accounts for about 80% of the world’s tungsten output, and there are concerns the government could add measures around tungsten scrap that would further constrict its availability. Almonty’s stock in Toronto has soared 41% over the last two days as investors price in scarcer supply of the super-dense material used in armor-piercing munitions, as well for engine parts and chip making. “It’s the warning shot, because we cannot exist without it,” Black said in a phone interview from his base in New York on Thursday. “Our economy, manufacturing, defense, everything, is so dependent on it. And yet, Russia, China and North Korea have about 90% of the output.” China has banned imports of tungsten scrap for a number of years, citing environmental concerns over how it’s processed. If it were to lift the embargo, it could suck in more supply and limit what’s left for other countries. That would create “a situation where it’s very difficult for my customers to compete with China,” said Black. “The question is, how much will China tighten the screw to be heard?” he said. “I think the news was bad, but I think it’s going to get worse.” The tungsten market is valued at roughly $5 billion, making it a relatively niche market compared with other major metals, such as copper at more than $200 billion, according toChina is the world’s biggest importer of the most heavily traded commodities like crude oil, soybeans and iron ore, leaving critical minerals as one of the few areas where its dominance over supply give it leverage. Its latest export controls affect four other minerals in addition to tungsten that have applications in high-tech industries. Beijing’s willingness in recent years to impose trade restrictions on critical minerals has forced companies in the US and its allies to seek alternatives to Chinese output. Almonty, which has operations in Portugal, is currently switching its domicile from Canada to the US. The firm is focused on expanding in South Korea, where it’s set to open a new mine in about two months that should in its first phase yield 2,500 tons of tungsten a year. In the US, tungsten hasn’t been mined commercially since 2015 and the nation has counted China as its biggest source of imports. Guardian Metal Resources Plc is developing a mine in Nevada and recently acquired another asset nearby. According to CEO Oliver Friesen, the Pilot Mountain project is expected to come online in three to three and a half years. “It’s such a critical time right now, and really the US needs a domestic source,” Friesen said in an interview, adding that things could speed up if there are potential further tailwinds from the Trump administration. “We do believe we are in a strong position ultimately, at some point, to receive some type of funding to support the developments of our projects.” China has already put export restrictions on gallium, germanium and antimony. That pushed up prices of the niche metals — which have crucial uses in many Western industries — and analysts also expect a similar price trend in the relatively small and concentrated market for tungsten. “International prices should rise on that,” said Huang Yuting, an analyst at Mysteel Global, adding that while China consumes most of its tungsten output, exports have gone to countries such as Germany and Japan.The Baovale joint venture was established by the Brazilian mining giant and Baosteel in 2001 to run the Agua Limpa mine.Critical Metals will issue 4.5 million shares with an offer of $5.00 per share, a significant discount to its opening price Thursday.Citi sees gold soaring to $3,000 on tensions triggered by Trump
International Relations TUNGSTEN CHINA EXPORT CONTROLS SUPPLY CHAIN GLOBAL MARKET
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