Tungsten - The forgotten Critical Metal Story

Tungsten - The forgotten Critical Metal Story

Since coming across the Tungsten industry in the second half of 2011, I have been a firm advocate on its place as a member of the critical metal space. Tungsten is one of the hardest metals to understand, in terms of market direction and the demand and supply directions. It is also the metal with the highest density property.


Tungsten’s other special property is that there is no viable substitute and the demand for the metal is traditionally very inelastic to price changes. Historically, when prices were rising, demand followed but from about 2014, prices dropped and we have not seen a recovery. Annually, the global market is between 80,000 to 100,000 tonnes of metals used so it’s a small market.

China is (was ?) a major user of the metal, China holds the largest resource in the world but during that price rising period, China was also a net importer of tungsten concentrate. So we are told… to me that did not make any sense.

In my past life as the Managing Director of Siburan Resources Limited (ASX: SBU), I watched the price of tungsten rise to an all-time high of nearly USD460/mtu (metric tonne per unit) to a low of sub-USD240/mtu. If I am not mistaken, it could have gone below USD200/mtu.

Mark Seddon – 2012 sourced: http://tungsteninvestingnews.com/4082-mark-seddon-why-you-should-look-twice-at-an-ugly-duckling-metal.html

“ In the context of an approximately 80,000-ton annual market with 3% growth, you need 2,400 tons of additional tungsten metal per year in supply, and with 5% growth you need 4,000 tons. That’s one new big tungsten project per year. It is difficult to see where that supply could come from. In the current market, miners can’t get the financing needed to take projects from a bankable feasibility study to construction. It’s a big problem. .”

In 2011, The British Geological Society published a list of what it considers the 52 most critical metals in the world. The list was compiled based on global abundance, location of production, reserves and supply risk associated with the political stability in the jurisdictions where the metal occurs. Tungsten was second on that list.

The report highlighted that tungsten (as well as rare earth) has lower recycling and low substitutability. The supply risk for tungsten stems from China’s role in the industry. China accounts for approximately 83% of global tungsten concentrate production and about 62% of global tungsten reserves. China became a significant player in tungsten production in the mid-1980s. By the late 1990s, it had flooded the global market with tungsten causing concentrate prices to plunge below most western producer’s variable cost. As a result, the vast majority of western mines were closed.

These were all the good thoughts at that time however, the market came crashing down which sort of made these comments questionable.

What is a good Tungsten grade?

The majority of tungsten deposits contain less than 1.5% tungsten trioxide (WO3), and most have grades of only a few tenths of a percentage point. A very high grade would be over 1%, like North American Tungsten’s Cantung mine. If I am not mistaken, the Cantung mine may be the only producing mine that had that kind of grade.

What’s interesting in the Tungsten world?

Have a look at the Northcliff project called Sisson in New Brunswick, Canada (http://www.northcliffresources.com/i/pdf/NCF_FactSheet.pdf). It’s a Tungsten-Molybdenum project that has a total resource of 334MT at 0.066% WO3 and 0.021% Mo

The other is the Nui Phao project in Vietnam owned by the Masan Group (Apparently they make their money from 2-minute noodles). It has a total resource of 97.4MT @ 0.1% WO3. It has Tungsten, Flurospar, Bismuth and Copper.


The issue with Tungsten is the market price. There is no spot market and it is very hard to measure or predict the direction of the price. What is apparent is that whatever you do, you need a large resource to sustain any mining activities. In my opinion, you need a Sission-type kind of deposit. Small deposits with high grades will find it extremely hard to make it work. Look at the old mines in China, they are all large scale and low grades.

In conclusion, like all mineral resource projects… Make sure they are mining the mineral in the ground and not the one on the stock market …….


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