Tungsten: Mining’s Next Boom Metal?

China’s recent decision to restrict tungsten exports is reshaping the global tungsten market, creating substantial opportunities for miners outside of China. This pivotal move has positioned tungsten as a potentially lucrative commodity for investors to watch out for in 2025.

Why China’s Decision Matters

China dominates global tungsten production, accounting for approximately 80% of the world’s supply. Consequently, any reduction in Chinese exports reverberates significantly throughout the market. This export restriction is part of a broader trend of resource nationalism sweeping through the industrial metals sector, led primarily by both China and the US, with other nations likely to follow suit. Alongside tungsten, China is also curbing exports of other critical minerals, including bismuth, indium, and tellurium, further impacting global supply chains.

Tungsten’s Importance to US Industry

The United States heavily relies on tungsten imports, with a significant portion sourced from China. This dependency underscores the increasing importance of North American tungsten miners. Notably, tungsten is vital for aerospace and military manufacturing, used in critical applications such as satellites and ammunition. China’s export restrictions have drawn attention to its strategic control over this essential resource, prompting potential shifts in sourcing and production practices.

Market Dynamics and Price Trends

In the wake of China’s announcement, tungsten prices, which had previously been on a decline, have seen a modest uptick. Analysts expect further price increases in February. Contributing to this positive price movement are various factors, including port disruptions in San Diego and rising production costs. Despite a temporary downturn in downstream demand for tungsten—partially attributable to China’s economic slowdown—the export restrictions could result in a buildup of tungsten inventories within China, tightening global supply.

Supply Constraints and North American Response

Supply constraints outside of China are anticipated to persist as well. North American tungsten traders appear to be holding onto their inventory, anticipating tighter supply conditions. The US tungsten market is expected to grow significantly in 2025 as the government prioritizes securing supplies and strengthening supply chains. In particular, the defense sector’s reliance on tungsten could elevate its importance on the government’s mining agenda.

Key Players to Watch

Almonty Industries (TSX: AII)

This Canadian-listed company is drawing considerable attention from investors. Almonty has recently signed a major off-take agreement with SeAH M&S, South Korea’s largest processor of molybdenum products, which owns the second-largest molybdenum oxide smelter globally. SeAH has committed to purchasing 100% of the material produced by Almonty’s Sangdong molybdenum project for the entire lifespan of the mine. Notably, the proximity of this project (150 meters) to Almonty’s tungsten project in Korea allows for significant operational synergies. As a testament to its burgeoning potential, Almonty’s stock has doubled year-to-date, and China’s actions are anticipated to further enhance its performance.

Fireweed Metals (TSXV: FWZ)

Another company capturing significant investor interest is Fireweed Metals. It has secured substantial funding from the US Department of Defense (US$22.5 million) and the Canadian government (C$12.9 million). Fireweed owns the Macpass District, which features a significant deposit of zinc, gallium, germanium, and tungsten. Notably, China has banned exports of gallium and germanium, which could benefit Fireweed’s prospects. Furthermore, the company enjoys backing from Canada’s Lundin family, who have been lead investors in multiple financing rounds. Recently, Fireweed’s stock has surged, increasing from C$1.43 to C$1.76 in the last five trading days (as of Friday’s close), showcasing a remarkable climb from its C$1.16 price in September.

Conclusion

China’s tungsten export restrictions serve as a wake-up call, highlighting the reliance of Western industries on Chinese minerals and the emerging potential of North American tungsten miners. With geopolitical factors driving market trends and the increasing importance of tungsten in defense and aerospace manufacturing, investors should closely monitor the developments in this sector. As the global demand for tungsten rises in parallel with tightening supply, opportunities may arise for those looking to invest in the mining industry’s next boom metal.