China Gripping on Tungsten

As one article recently pointed out, China, have put tungsten on the radar of critical metals investors. Legendary investor Warren Buffett – who won’t invest in gold, but through a subsidiary of Berkshire Hathaway dumped $35 million on Woulfe Mining, a tiny tungsten junior in South Korea – must be on to something.

The fundamentals for tungsten, a crucial ingredient in toolmaking, including oilfield and mining drill bits, are indeed impressive. The metal that sold for around $50 a tonne in 2000 is now changing hands for $400/t, an eight-fold increase. For years China has had a lock on the supply of tungsten, producing some 80 percent of global consumption, but that is beginning to change as the country implements export restrictions and suspends mining permits in an effort to protect its domestic market. Other countries with tungsten deposits include Russia, Canada, South Korea, Bolivia, Austria, and Portugal – opening up possibilities for juniors eager to crack the Chinese monopoly. Tungsten, however, is not exactly easy to find. The British Geological Survey ranks it among the scarcest elements on earth – rarer than even rare earths. As supply tightens, the demand for the brittle grey and white metal is equally compelling. Tungsten is the hardest metal on the planet, 100 times more resistant than steel, and toolmakers have no substitute for it.