Tungsten: Seoul Revives Its Mines to Break Free from China's Monopoly on a War Metal

Context

South Korea is reviving its tungsten mines—a critical metal for hard alloys (tungsten carbide), munitions, and precision electronics—to reduce its dependence on Chinese exports, which have historically accounted for over 65% of South Korea's supplies. China controls ~80% of global production, making tungsten one of Beijing's least visible but most powerful geopolitical levers.

Data

• Global tungsten production: China ~80% (USGS 2025 source)
• South Korean imports from China: ~65-70% historically
• Sangdong Mine (South Korea): one of the largest tungsten deposits outside China – operator: Almonty Industries (AII.TO)
• APT (ammonium paratungstate) price: ~330-340 $/MTU (2026, Metal Bulletin reference)
• Chinese export restrictions on critical minerals: gallium/germanium (2023), rare earths (2025), trend extending to other strategic metals
• Japan: clothing imports from China at their lowest in 31 years – macro signal of global geoeconomic decoupling

Analysis

Tungsten highlights the silent vulnerability of industrial economies: a concentrated metal, difficult to substitute in the short term, essential for precision machining, drill bits, and armor-piercing munitions (kinetic penetrators). The reactivation of Sangdong is not insignificant—it signals that Seoul is factoring supply disruption risks into its industrial planning, similar to U.S. strategies on rare earths. It is part of a broader diversification trend accelerating since China's 2023 gallium/germanium restrictions: Europe (Portugal, Spain), Canada, and Australia also have tungsten projects under development.

The analogy with lithium is instructive: when alternatives ramp up, China floods the market to keep prices low and deter competitors—a strategy documented with LFP (down 70% since 2022). The same risk exists for tungsten.

Probability-weighted scenarios

• Sangdong ramps up by 2028-2029 (40%): South Korean dependence reduced below 40%, strong signal for Japanese and European buyers. APT prices stabilized outside Chinese control.
• China imposes tungsten export restrictions (35%): APT price >400 $/MTU, acceleration of alternative investments in Europe and the Americas. Almonty Industries valued at a premium.
• Capex difficulties and production delays (25%): China maintains leverage through predatory pricing; alternative projects stagnate due to short-term unprofitability.

Portfolio implications

Kennametal (KMT) & Sandvik (SAND.ST)

Tungsten carbide tool manufacturers, indirect beneficiaries of supply chain security.

Multi-year theme: reducing dependence on Chinese minerals is a cross-party political priority in South Korea, Japan, and the EU—sustained regulatory support.

Risks & blind spots

High capex costs to reopen closed mines. Unavoidable production ramp-up delays (3-5 years minimum). China could lower export prices to deter alternatives—as it did with lithium. Taiwan-China tensions could trigger unilateral restrictions but also create a sudden shortage before alternatives are operational.

To monitor

Sangdong production Q3-Q4 2026 · Tungsten APT price · EU updated critical materials list decision · New Chinese export restrictions on strategic metals · UK/EU mining strategy H2 2026