Tungsten Shock for Sandvik and Lockheed Martin – Almonty in a Perfect Position

Sandvik and the Limits of Recycling

As one of the world's leading producers of cutting and drilling tools, Sandvik feels the impact of the geopolitical situation daily. Through its Austrian subsidiary Wolfram Bergbau und Hütten, the Swedish conglomerate operates its own processing line, including the Mittersill underground scheelite mine in the Salzburg region, where crushing takes place in a modern cavern deep within the mountain. In St. Martin im Sulmtal, Styria, Sandvik operates one of the few remaining hydrometallurgical smelters in the Western world to process raw ore and scrap into high-purity powders. To secure sufficient material, the cutting tools division, Sandvik Coromant, is aiming to achieve a buyback rate for used carbide tools by 2028. Nevertheless, the closed-loop system has its limits. High-speed machining of heat-resistant superalloys such as Inconel 718 or titanium alloys used in aircraft fuselages always results in abrasive wear. For those familiar with the industry, the situation is clear: worldwide, around 70% of the tungsten used in industry is permanently lost through abrasive wear and other mechanisms and cannot be recycled. This forces the Scandinavian company to continuously purchase additional tungsten on the tight global market.

Lockheed Martin and the Export Ban

At the end of the value chain, Lockheed Martin faces regulatory hurdles. The US defense giant has an order backlog of over USD 230 billion but must adapt its entire supply chains to a new regulatory regime: a Pentagon directive prohibits, effective January 1, 2027, the delivery of military goods containing tungsten that was mined or refined in China, Russia, North Korea, or Iran. For the company, this represents an enormous undertaking, as tungsten is also used in ammunition. A single warhead contains approximately 180,000 preformed tungsten fragments to achieve an armour-piercing effect without the risk of duds. Because interceptor missiles such as the PAC-3 and THAAD also rely on high-density ballast weights, the production of ammunition requires enormous quantities of tungsten.

Almonty: The Flagship Sangdong Project Is on Track

Amid the tightening global supply situation, tungsten producer Almonty is taking on a pivotal role. The company's flagship project is the historic Sangdong Mine in South Korea's Gangwon Province, which once supplied a significant share of global tungsten demand. Almonty rehabilitated the deposit with the support of a USD 75.1 million loan package from Germany's KfW IPEX-Bank, as well as equity from Austria's Plansee. Geologically, the project stands out significantly from the competition. The company estimates its proven and probable reserves at 7.90 million metric tons of ore with a grade of 0.45% WO₃, which is more than twice the global industry average. In Phase 1, which is now ramping up, the automated flotation plant processes 640,000 metric tons of raw ore annually into approximately 2,300 metric tons of WO₃ concentrate, before expansion to an annual capacity of 1.2 million metric tons is scheduled to take place by 2027. With estimated operating costs of approximately USD 110 per MTU, Almonty secures exceptionally high cash flow margins at current market prices of over USD 3,000 per MTU. The marketing of the tungsten has long been secured. In July 2026, Almonty extended its offtake agreement with Global Tungsten & Powders to 21 years and a total volume of 4.41 million MTU, corresponding to a contracted annual revenue at current APT pricing of approximately USD 490 million. This contract covers approximately 90% of the first phase of expansion and includes a fixed price floor of USD 183 to USD 235 per MTU, along with full participation in rising global market prices.

Almonty Has Even More to Offer: Broad Project Portfolio and Strategic Expansion

In addition to its flagship project in South Korea, Almonty has other projects in Western jurisdictions. In Portugal, the Panasqueira mine has been continuously supplying high-purity tungsten concentrate with grades exceeding 65% WO₃ for over 125 years. Management is currently pushing ahead with the development of the deeper Level 4 to double annual throughput and significantly extend the mine's life. At the same time, the mining group is gaining a foothold directly in the US. The Gentung Browns Lake project in Montana, acquired last year, is set to be gradually brought into production in the coming months. In Spain, the portfolio is rounded out by the reprocessing of tailings at the Los Santos site, with 3.77 million metric tons of reserves at 0.13% WO₃, and the Valtreixal tin-tungsten project—with 2.58 million metric tons of reserves at 0.35% WO₃. In addition, Almonty is developing a separate molybdenum deposit at the Sangdong site, whose production is already marketed through a firm agreement with SeAH M&S and will be shipped to the US.

With the US legislative landscape set to change starting in 2027, Almonty is increasingly becoming the focus of industry. Once fully operational, Sangdong alone is expected to account for between 30% and 40% of all tungsten concentrate produced outside of China. Added to this is further potential from existing projects and the company's substantial capital base, which was strengthened by the securing of an USD 800 million credit line this summer. Most recently, the company also announced a USD 300 million share buyback program. The latter should significantly reduce the risk of sell-offs like those that occurred in recent months. Almonty has what many urgently need: tungsten. The stock must therefore be considered an attractive investment. Analysts at Bank of America and Oppenheimer share this view, attributing upside potential to the stock beyond USD 20.