The World Can’t Do without Tungsten

IMC Group is one of the world’s largest metalworking product firms. It’s 80% owned by Warren Buffett’s holding company Berkshire Hathaway. And IMC has recently invested $80m in a mining project.

It isn’t in the US, or indeed anywhere near it. It’s at Sangdong, in South Korea, and it’s controlled by a firm called Woulfe Mining. The deal gives Buffett a 25% stake in what was the world’s most productive resource of one rare metal - tungsten.

What’s so special about tungsten? It’s hard to know where to begin.

Tungsten is ultra-hard, dense and strong. It’s also highly resistant to corrosion and wear. And it’s fire-proof - it has the highest melting point of all pure metals, and the second highest of all the elements after carbon.

Pure tungsten is used mainly in electrical products. But in alloy form – due to its hardness - tungsten has many applications, from industrial to military.

It’s employed in incandescent light bulbs, X-ray tubes and electrodes in arc welding. Tungsten carbide, a compound of tungsten and carbon that’s three times stiffer than steel, is used to make drill bits for oil and gas exploration, circular saws and jewelry. The metal’s ability to withstand extreme heat makes it irreplaceable in the manufacture of rocket engines.

In fact, global demand for the metal has been growing at around 6% a year for ages. And the world is now become totally dependent upon it. That’s because in most of the metal’s uses, there’s no alternative. Indeed, “without tungsten, Western manufacturing comes to an end”, Wolfe’s investor relations manager Nick Smith tells Tungsten Investing News.

What’s more, the future needs of high-tech industries are set to drive demand even higher. Tungsten is crucial for the manufacturing of electrodes used in solar panels and nuclear equipment. And it’s a vital component in touch screens of smart phones and tablet devices.

This means the world’s tungsten miners will need to lift overall output from last year’s 68,000 metric tonnes (m/t) to 96,000 m/t by 2016 just to keep pace with demand.