From your perspective, what are the biggest trends shaping the outlook of the metals and mining sector?
China’s export restrictions on strategic metals, particularly tungsten, are the biggest market factor now, and these will have repercussions for years. China, along with Russia and North Korea, controls about 90% of the world’s tungsten supply. For practical purposes, the Chinese export controls are a ban on sales to foreign firms, and tungsten exports to U.S. defense contractors are explicitly banned. This would be an acute crisis except that our Sangdong tungsten mine will begin producing within the next several weeks. Sangdong is the largest tungsten mine in the world, but it can’t replace China’s 90% of world supply. Consumers should anticipate high prices and frantic efforts to expand supply for a long while.
In your recent TradeTalks interview, you specifically highlighted the lack of mines for Tungsten outside of North Korea, China and Russia. What shifts do you anticipate in the mining space, especially as tariffs go into effect?
President Trump has made it clear that he wants more domestic U.S. mining and processing, which is the right move, so we are certain to see a lot of investment flowing into mining and processing. However, everyone needs to realize that standing up a domestic mining industry is going to be a slog. For some metals, tungsten being one, U.S. reserves will never be sufficient to meet domestic demand.
Removing the barriers to permitting mines domestically is important, but the U.S. needs a reliable supply of critical metals now. Other nations are locking up deals for critical metals all over the world. The U.S. needs to get into that arena to buy time to get a domestic mining and processing industry in place.
You also spoke about the need to find a balance in the supply chain. How are you preparing Almonty as the U.S. navigates this path toward a more balanced supply chain?
Tungsten is the quintessential military metal. The U.S. uses tungsten to produce every caliber of munitions and to produce armor that resists penetration by tungsten rounds. As incredible as it is that for years this production relied on Chinese tungsten, that arrangement is over. Almonty is redomiciling as a U.S. corporation, which will make us eligible for all sorts of assistance from the U.S. government, and we rapidly integrating ourselves in the U.S. defense raw materials supply chain. Quite soon, Almonty will officially be the only producing U.S. tungsten mining company.
Do you have any unique predictions on the outlook of metal production?
I can predict what won’t happen. This trade war has given China the excuse it wanted to restrict exports of critical metals. China developed its mining sector by exporting raw materials, but China now is a major consumer of tungsten, rare earths and the other strategic metals. Chinese industry can use as much of these metals as it can get. They want the same profit margins turning raw materials into sophisticated manufactured products that we have enjoyed. China will never again export tungsten and other critical metals to whoever wants some, and cheaply, as they did for many years.