In a comprehensive interview with The Metals Report, analyst Mark Seddon explains why Tungsten should be on people’s watch list, or, as the interview headline suggests: “Why you should look twice at an ugly duckling metal.”
Like some of the other critical metals and minerals we have covered on our blog – Antimony and Cobalt come to mind – Tungsten lacks the “sex appeal that made investors fall for the rare earth story.” Says Seddon:
“One of the big differences between tungsten and REEs is their applications. Tungsten is a very industrial metal. It’s mainly used as a carbide or “hard metal” in drilling and cutting tools used in heavy industry. Tungsten is not sexy in that sense. It’s a very solid industrial market. This contrasts with REEs, which are used in a lot of newer, high-tech applications that are much easier for the investment community to make into an exciting story.”
While Tungsten may be used in industrial applications that don’t get people as excited as, say, green technologies, there are no viable substitutes at this point.
Meanwhile, there is a strong geopolitical aspect factoring into the Tungsten narrative: As is the case with Rare Earths, most of the world’s Tungsten comes from China, which accounts for roughly 80 percent of global Tungsten output, a fact that invites similar challenges as the ones manufacturers relying on REES have seen in the past.
Further complicating the supply picture for domestic manufacturers is the fact that Tungsten from the Eastern region of the Democratic Republic of the Congo and surrounding regions, another main source of supply, has been labeled a conflict mineral and subjected to a series of (confusing) reporting requirements under the 2010 Dodd-Frank financial reform law and respective rules handed down by the SEC in 2012.
A partial solution to at least some of the challenges may lie in the domestic development of our Tungsten supplies, which would allow for reducing our overreliance on foreign minerals and allow for “conflict-free” sourcing. In any case, however, the Tungsten narrative once more shows that critical resource policy cannot occur in a vacuum, as the strategic implications of our supply issues stretch far beyond the now often-discussed Rare Earths story.