China’s tungsten clampdown sparks market optimism

China’s export controls on critical mineral tungsten could mean higher prices for the commodity and healthy market conditions for ASX companies.

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• China's export controls on critical metals like tungsten could mean higher prices for the commodity 

• Higher prices generally provide companies with greater potential to raise funds

• Juniors such as Tungsten Mining are set to benefit 

Market prices for tungsten, the barely talked about critical mineral used across tech, defence and clean energy applications, could move sharply higher following news of export controls out of China earlier this month.

It's the latest attempt by the Middle Kingdom to weaponise its dominance in the mining and processing of critical minerals with the most recent controls targeting four other metals – indium, tellurium, molybdenum and ruthenium.

China is already the top producer of all five restricted metals and dominates the global tungsten market, controlling about 80% of the world’s supply.

The export controls require licences to export 20 tungsten, tellurium, bismuth, indium and molybdenum related products to ‘safeguard’ China’s national security interests with experts concerned the government could add measures around tungsten scrap that would further constrict its availability.

Exports restrictions placed on gallium, germanium and antimony last year resulted in higher prices of the niche metals with analysts anticipating a similar price trend for tungsten.

Higher tungsten prices

Higher commodity prices generally provide companies with greater potential to raise funds for drilling and exploration activities and results in a healthy wave of market action including M&A deals and strategic partnerships/joint ventures.

Stocks of the small handful of tungsten miners also recorded big gains following China’s announcement including that of preeminent player Almonty Industries (ASX:AII), which soared 41%.

Almonty CEO Lewis Black told Kitco the move was a warning shot, with many of his customers in a state of disbelief.

Small-cap juniors such as EQ Resources (ASX:EQR) and Tungsten Mining (ASX:TGN) also climbed in the aftermath by ~33% and ~20% respectively.

EQR produced 42,292 metric tonne units (422,920kg) of tungsten in concentrate during the second quarter of FY2025 following record output from its Saloro operations in Spain.

It also owns the Mt Carbine asset in Queensland, which saw a decline in output due to waste stripping efforts and lower-grade ore deliveries during the quarter.

At the end of last year, EQR announced the execution of a Heads of Agreement to acquire TMG Group, owners of the 4000tpa ferrotungsten plant in Vinh Bao in Vietnam’s Haiphong Province – one of the largest facilities of its kind outside China.

Resource underway for Tungsten Mining

Resources junior GWR Group (ASX:GWR) reaffirmed to shareholders yesterday its confidence in tungsten, following China’s decision to impose export controls on the metal.

Despite its cash and investments totalling $53.6 million as of December 2024, GWR’s market capitalisation of $27.6m leaves it trading below its net asset value.

GWR holds no debt with a large portion of its investment portfolio tied up in ASX-listed securities including Tungsten Mining (ASX:TGN) in which it holds 177.5m shares valued at $16.15m.

GWR told shareholders in a market update that TGN could benefit from the restrictions, which are expected to push prices up as industries scramble to secure supplies.

TGN owns several tungsten projects around Australia and completed the acquisition of the remaining 80% stake in the Hatches Creek project during the December 2024 quarter, where a maiden resource is currently underway following a successful drilling campaign.

The project, about 375km north-east of Alice Springs in the Northern Territory, contains multiple high-grade polymetallic tungsten prospects and demonstrated potential for a tungsten deposit.

Drilling confirmed the continuity of mineralisation at the Hit or Miss target and Treasure targets while intersecting multiple zones of tungsten-copper mineralisation at the Green Diamond target.

It also delivered standout intersections including 5m at 2.05% WO, 7m at 1.39% and 15m at 0.44%.

Meanwhile, discussions with key stakeholders to map a suitable approvals pathway for development is ongoing with onsite fauna surveys planned for the upcoming quarter.

At Stockhead we tell it like it is. While GWR Group and Tungsten Mining are Stockhead advertisers, they did not sponsor this article.

Originally published as China’s tungsten clampdown sparks market optimism