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| Plansee |
China’s Export Restrictions Escalate Critical Minerals War
China’s response to U.S. tariffs includes new restrictions on the export of five key critical minerals: bismuth, indium, molybdenum, tellurium, and tungsten. These materials will now require special Ministry of Commerce approval, particularly to ensure they are not used for military applications.
Tungsten’s Strategic Importance
Tungsten, in particular, is crucial to both civilian and military industries. With the highest melting point of any element, tungsten is used in applications ranging from industrial tools to high-performance electronics. Tungsten carbide, second only to diamond in hardness, is essential for mining, machining, and semiconductor production. Additionally, tungsten is a key material for armor-piercing military projectiles, making it highly sought after in ongoing global conflicts, including in Ukraine.
Western Supply Chain Challenges and Solutions
China dominates the tungsten market, producing 83% of the global supply in 2023. The U.S. has not mined tungsten commercially since 2015, relying heavily on imports, with 37% of its supply coming from China last year. In response, the Biden administration imposed a 25% duty on Chinese tungsten imports in December 2024, aiming to reduce reliance on Beijing. The U.S. military must also phase out purchases of Chinese and Russian tungsten by 2027.
To secure alternative supply, the U.S. Defense Logistics Agency plans to procure up to 2,040 metric tons of tungsten concentrate by September 2025. Additionally, the Department of Defense has allocated $15.8 million to Fireweed Metals Corp to advance the Mactung tungsten mine in Canada’s Yukon. However, the project is still in the feasibility stage and remains years away from production.
South Korea’s Sangdong Mine: A Crucial Restart
The West’s most immediate tungsten supply solution lies in South Korea’s Sangdong mine. Once a key producer, Sangdong ceased operations in the 1990s due to low prices. Now, Almonty Industries is reviving the site, with the first phase of 2,300 tons per year already in commissioning. A second phase of similar capacity could follow within a year.
All initial production from Sangdong has been pre-sold to Global Tungsten & Powders, a subsidiary of Austria’s Plansee Group. The contract includes a guaranteed minimum floor price of $235 per metric ton unit (mtu), shielding production from market volatility. With current tungsten prices at $342.50 per mtu, this agreement underscores how critical the mine’s output is to non-Chinese markets.
The Future of Tungsten Supply
China has yet to impose a full export ban on tungsten, but past actions suggest that further restrictions may follow. Similar licensing measures preceded Beijing’s outright bans on germanium, gallium, and antimony exports to the U.S. If a complete tungsten embargo occurs, prices could skyrocket, much like antimony, which surged from $11,000 to $47,250 per kilogram in early 2024.
Plansee’s strategic pricing mechanism with Almonty highlights the urgency for Western industries to secure stable critical mineral supplies. As geopolitical tensions mount, relying solely on open market prices may no longer guarantee access to essential materials.
