Tungsten – Where the critical element is irreplaceable: Almonty, LAM Research, Rheinmetall

Tungsten in metal processing – Analysts expect 5% annual growth

When Almonty brings its Sangdong mine in South Korea into production in the coming weeks, it will, for the first time, create a significant counterweight to China's market dominance. Sangdong alone could account for up to 40% of tungsten supply outside China. Alongside this, Almonty also mines the coveted metal at the renowned Panasqueira mine in Portugal. In recent years, the Company has become increasingly competitive in its price war with Chinese competitors, with the result that Sangdong boasts production costs that are around half those of its Chinese competitors, even while meeting high ESG standards. Western buyers are eager to secure Almonty's tungsten, as without replenishment, many factories could soon face production stoppages.

Much of the demand for tungsten comes from metal processing industries. Whenever drilling, sawing, milling, or turning is involved, products containing tungsten are used. Drills for tunnels or mining and other heavy construction machinery also rely heavily on tungsten or tungsten carbide. According to market researchers at SFA Oxford, tungsten carbide has a hardness of 8.5-9.0 on the Mohs scale and is the hardest material after diamond. Possible alternatives such as molybdenum carbide, niobium carbide, or titanium carbide fail to deliver comparable performance. The think tank IMARC estimates that the global market for tungsten carbide will grow by just under 5% annually between 2025 and 2033.

Automotive and electronics industries: Molybdenum only sometimes an alternative

An important driver of tungsten demand is the automotive industry. In addition to classic engine components such as crankshafts and ball joints, tungsten is also found in welding electrodes for cable harnesses and battery connectors. Brakes are also difficult to manufacture without tungsten. Molybdenum is a suitable substitute for standard applications, but when it comes to maximum performance, there is no way around tungsten.

Companies in the semiconductor and electronics industries, as well as in medical technology, continue to rely on tungsten. Specific areas of application include semiconductor connections between silicon dioxide and transistors, electrodes, X-ray tubes, and simple coils for incandescent and halogen lamps. In some instances, molybdenum serves as a substitute and can even offer slightly better performance at the atomic dimensions typical of modern chips. However, as chip manufacturer LAM Research writes on its website, tungsten remains indispensable for industry.

Tungsten irreplaceable in defense and aerospace – Up to 20% annual growth

The aerospace industry is also considered a classic consumer of tungsten products. The special properties of tungsten are exploited in the manufacture of engine components, rocket nozzles, and counterweights. In this area, tungsten is considered irreplaceable – the element impresses with a melting point of 3,422°C and extreme density and strength. These properties also make tungsten irreplaceable in the military sector: ammunition, rocket systems, armor, and components for military electronics would be unthinkable without this critical element. Market researchers at Verified Market Reports estimate that the market for tungsten penetrators in caliber ammunition alone will grow by 4.5% annually through 2033. Total NATO consumption is estimated at 2,500 tons of tungsten per year. Analysts see military demand for tungsten rising between 9 and 20% annually, depending on the conflict scenario. Currently, the defense industry accounts for between 12 and 15% of global tungsten demand.

Only Almonty has what everyone needs – Shares attracting investors

The US Department of Defense has therefore classified tungsten as a "defense-critical material" under the Defense Production Act and plans to build up strategic reserves, as the country does not yet have its own production of the metal. Tungsten producer Almonty has announced its intention to acquire an existing project within the US. Tungsten is also in short supply in Europe: estimates suggest that Europe consumes around one-third of the world's tungsten, but only produces around 3% – much of which comes from Almonty's Pansqueira mine in Portugal. Defense companies such as Rheinmetall are therefore likely to intensify efforts to reduce their dependence on uncertain import routes.

Almonty is already one of the few Western suppliers of tungsten. In addition, both Panasqueira and Sangdong score highly with high grades and low production costs that are unique worldwide. This combination of availability and expertise is currently attracting a great deal of interest – not only from private investors, but also from strategic investors who want to ensure security of supply given the importance of tungsten for many areas of industry. In addition, Almonty also has molybdenum deposits. This is the only alternative to tungsten in many areas. The price of tungsten has doubled in the past three years and continues to rise – Almonty is the only significant supplier in the West and thus the biggest beneficiary of this development.