The Rising Importance of Tungsten in Global Supply Chains

China holds a significant portion of the world’s critical minerals supply chain, including tungsten. This metal, known for its hardness and high energy density, plays a crucial role in various industries such as weapons, autos, electric car batteries, semiconductors, and industrial cutting machines. Chipmakers like Taiwan Semiconductor Manufacturing Company and Nvidia rely on tungsten for their operations.

Global Efforts to Diversify Away from China

Despite China’s dominance in tungsten supply, efforts are underway to diversify away from the country. The Biden administration raised tariffs on tungsten imports in May, signaling a push towards reducing dependency on Chinese supply. Additionally, countries like the U.S. and Europe are seeking China-free supply chains for critical minerals to enhance their security and stability.

The Impact of Regulatory Moves

China’s recent decision not to include tungsten in new regulations for boosting domestic rare earths production raised eyebrows. While the U.S. has imposed tariffs on the metal, China remained unfazed, indicating a reluctance to escalate tensions. However, the increasing demand for non-Chinese tungsten suggests a shifting landscape in the global supply chain.

With expectations of higher demand and limited supplies, the price of tungsten has soared to multi-year highs. Efforts to secure new sources of tungsten outside China, such as the forthcoming mine in South Korea, highlight the importance of diversification in the supply chain. Companies like Almonty Industries are investing in reopening mines to reduce reliance on Chinese supply.

Despite the growing demand for tungsten, challenges persist in establishing new sources of production. Projects to extract tungsten outside China have faced delays and setbacks, hindering efforts to bolster global tungsten capacity. The longevity of these projects raises uncertainties about their operational timelines and effectiveness.

The Role of Non-Chinese Companies

Non-Chinese companies are also entering the tungsten supply chain, further contributing to efforts to diversify sourcing. Investments in countries like South Korea for tungsten production facilities indicate a growing interest in reducing dependence on Chinese supply. Companies like IMC Endmill are exploring opportunities to manufacture tungsten powder outside China, signaling a shift in the global supply chain dynamics.

The rising importance of tungsten in global supply chains underscores the need for diversification and the pursuit of alternative sources outside China. As countries seek to enhance their security and reduce reliance on Chinese supply, the future of tungsten production lies in expanding the global supply chain network. Despite challenges and uncertainties, the growing demand for tungsten presents opportunities for companies to invest in new sources and contribute to a more secure and stable supply chain.