The rise of protectionism and prospects of increasing tariffs between the US and China prompted discussions about the need to mine tungsten domestically in the US during the International Tungsten Industry Association (ITIA) conference in Barcelona this week.
"The development of domestic tungsten production in North America is critical," a US tungsten consumer told Argus. The hard metal is gaining attention from the Department of Defence (DoD) owing to its applications within defence industries and potential future use in nuclear fusion. The lack of domestic tungsten is considered a significant risk to US national security.
The US introduced a 25pc tariff on imported Chinese tungsten-related products effective from 1 August 2024. Furthermore, imports of tungsten-mined ore from China and Russia for DoD procurement will be banned from 2027.
The DoD is providing an increasing number of grants for companies to establish domestic manufacturing. It is doing so through programmes such as the Defence Production Act Investments (DPAI), which, since the beginning of the fiscal year 2024, issued 55 awards totalling $555mn.
"Many parties want us to move this project forward as quickly as we can," said Oliver Friesen, executive director of junior miner Guardian Metal, which is developing the largest tungsten deposit in the US, Nevada. "If we were to start production today, the tungsten concentrate from (our project) Pilot Mountain would represent the only primary domestic production in the US," Friesen said.
Guardian Metal anticipates it can source 20pc of US tungsten consumption within three years.
This funding initiative for domestic manufacturing has bipartisan support from both Republicans and Democrats, but it could accelerate with Donald Trump in the White House. The president-elect proposed tariffs of up to 20pc on all foreign goods and 60pc tariffs on all imports from China on the campaign trail. China accounts for more than 80pc of global tungsten production. One conference attendee told Argus he anticipates the tariffs to be a reality and not mere rhetoric.
Any measures could provoke a retaliatory response from China, which has already imposed export controls on dual-use materials such as antimony, gallium and germanium.
Despite this, some traders express scepticism about the need for the US to produce its tungsten, as consumers are sourcing material from "friendly jurisdictions" and political allies such as Portugal and Spain, and have plans to buy from South Korea. Additionally, the demand for virgin material may decrease, given the increasing viability of recycling, suggesting that less material may be necessary.
However, amid regional shifts, one participant emphasised, "If the US becomes isolated, the material needs to be produced domestically."
