The United States needs more tungsten. China is a major supplier of this essential metal

Pictured is a rock containing tungsten ore inside a mine in Germany operated by Saxony Minerals and Exploration.

Alliance Photo | Alliance Photo | Getty Images

BEIJING China dominates the supply chain for many of the world's most vital minerals, but it has so far refrained from imposing sweeping restrictions on at least one of them: tungsten.

Tungsten is a metal almost as hard as diamond and has a high energy density. That's why it's an important material in weapons, automobiles, electric car batteries, semiconductors, and industrial cutting machines. Chipmakers such as Taiwan Semiconductor Manufacturing Company and Nvidia both use the metal.

“I don't expect any controversy over tungsten,” said Lewis Black, CEO of Almonty Industries, a Canada-based company that is spending at least $75 million to reopen a tungsten mine in South Korea later this year.

“If you get too belligerent about diversification, [it becomes a situation that’s] “Bite the hand that feeds you,” he said, adding that “tungsten has always been a diplomatic metal.”

While the Biden administration raised tariffs on tungsten imports in May, China did not include the metal in new regulations aimed at tightening its oversight of domestic rare earth production.

But China may not be too worried because the Chinese government has ignored the new tariffs… They've completely ignored them because the Chinese don't want tensions to escalate.

Lewis Black

CEO of Almonty

“The tariffs were more of a warning shot, since Biden only imposed tariffs on three of the 25 strategic metals that China exports,” Black said.

“But China may not be too concerned because the Chinese government has ignored the new tariffs, unlike in the past when it restricted some rare earth exports. It has completely ignored them because the Chinese do not want tensions to escalate.”

Asked last month whether China would retaliate against the latest U.S. tariffs on tungsten, Chinese Commerce Ministry spokesman He Yadong stopped short of announcing any countermeasures. Instead, he called on the U.S. to remove the additional tariffs.

Commodity price analysis and reporting firm Fastmarkets noted earlier this year that China had cut domestic production quotas for its tungsten mines due to environmental restrictions.

Diversification outside China

Black, however, expects his company to benefit from growing efforts to diversify out of China. Almonty says the future mine in South Korea has the potential to produce 50% of the world's tungsten supply outside China.

Demand for non-Chinese tungsten is already rising.

“We see that in the United States and Europe, they are asking their suppliers for a China-free supply chain,” said Michael Dornhofer, founder of metals consultancy Independent Supply Business Partner.

The U.S. Restoring Essential Energy and Security Holdings Onshore for Rare Earths (REEShore) Act of 2022 bans the use of Chinese tungsten in military equipment starting in 2026, while the European Commission last year extended tariffs on imported Chinese tungsten carbide for another five years, Almonty Industries noted in a report.

Last month, the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party announced the creation of a new working group on U.S. critical minerals policy.

Tungsten Prices Soar

Expectations of increased demand and limited supply of tungsten have pushed prices to multi-year highs, although they have eased in recent weeks.

Dornhofer said in an interview in late May that he was also seeing Chinese buyers increase their purchases of tungsten.

“Since the beginning of this year, they are not only asking for Western concentrate, but they are buying large volumes, paying even more than Western companies are willing to pay,” he said. [going to be] a game changer.

In January, US research firm Macro Ops stated: “We are approaching an inflection point in tungsten supply. The US will rapidly deplete its tungsten inventories and shift from a net seller to a buyer over the next 12 to 18 months.”

The Commerce Department's Bureau of Industry and Security did not immediately respond to a CNBC request for comment on this story.

Brandon Beylo, head of investment research at Macro Ops, told CNBC in an email that there are only six companies in the U.S. capable of producing tungsten. He added that the U.S. has not produced tungsten domestically since 2015, meaning future U.S. supplies will have to come from abroad.

He said the company does not own any tungsten-related stocks, but he is personally looking for ways to access the physical commodity. There are no futures contracts for trading tungsten.

Other tungsten players head to South Korea

China dominates more than 80% of the tungsten supply chain, although local production costs are rising as mines age, according to Argus, noting Chinese imports of the metal from North Korea, central Africa and Myanmar.

“This represents an opportunity for projects outside of China,” Mark Seddon, director of consulting and analysis at Argus, said in a June 28 webinar.

Other non-Chinese companies in the tungsten supply chain are looking to South Korea.

In February, IMC Endmill, a subsidiary of Warren Buffett-owned IMC Group, signed an agreement with the Daegu city government to invest 130 billion Korean won ($93.6 million) in a tungsten powder manufacturing plant, according to a local media report.

IMC Group did not immediately respond to CNBC's request for comment.

China's dominance in global critical mineral supply chains has been built over decades.

Dornhofer noted that efforts to produce tungsten outside China have stalled for years, including plans for a mine in New Brunswick, Canada, that would have significantly increased global tungsten capacity.

All these projects have been on the table for 20 years, he said. “When people tell you that in two or three years they will be operational, it's a question of whether you believe them. [hand]tungsten is in the ground. It's still there.

Almonty claims to be the largest tungsten producer outside China and currently operates mainly in Portugal and Spain. The planned Sangdong mine in South Korea closed in the 1990s.

After the mine reopens later this year, Black expects his company to account for only 7 or 8 percent of the world's tungsten supply.

“We will not oust any Chinese,” he said. “We have no intention of doing so.”

“Now, if we want to produce 30 to 40 percent, I'm going to fight China, which would not be a smart move.”

Sources 1/ https://Google.com/ 2/ https://www.cnbc.com/2024/07/03/us-needs-more-tungsten-china-is-a-major-supplier-of-the-critical-metal.html The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos