Tungsten remains a key pillar of Western governments' plans to expand critical mineral production, driven in part by its defense applications, even as prices decline from recent peaks. Oliver Friesen, chief executive of tungsten mine developer Guardian Metal Resources, spoke with Argus about the obstacles and goals facing Western producers and the market as a whole. Edited highlights follow.
Tungsten is among the several commodities currently in the crosshairs of Western policymakers because of Chinese export controls and the related spike in pricing, but what makes tungsten uniquely important to address for Western end-users?
Tungsten is important because upstream production is heavily concentrated in China, Russia and North Korea.
The US has lacked tungsten mine production for over 10 years, and in general supply is concentrated to just a few countries. This challenge in addressing supply has put it so high in the crosshairs of policymakers aiming to build up Western supply.
What are some under-appreciated but important tungsten consuming industries that you aim to target?
We estimate that nuclear fusion is one of those markets and probably for good reason.
Regardless of the timeline, nuclear fusion will ultimately require multiples more than is currently produced.
There is already demand from the research and development side of the fusion market, and producers need to be prepared when that demand manifests to meet it.
How much tungsten do you anticipate non-Chinese producers will need to add to cover the difference of what China used to export?
I would estimate tens of thousands of metric tonnes (t) per year, potentially as much as 50,000t/yr if Chinese export restrictions remain in place.
Guardian alone will be insufficient and it will require other Western developers and producers to fulfil the current gap.
Which segment of the tungsten supply-chain do you aim to target, and why?
Given our focus on the US market, we intend to supply concentrates and primary because that is the current bottleneck, but this is going to change over time.
The US has sufficient and ample processing capacity between the facilities at Towanda, Pennsylvania; Huntsville, Alabama, and Fallon, Nevada, of sodium tungstate and concentrate to turn them into intermediates. As more mine supply comes on line that bottleneck will likely shift downstream to processing capacity, but at the moment the focus is on mine capacity.
Do you believe pricing mechanisms like price floors we have seen in other critical mineral markets like rare earths will be necessary to sustain ex-China projects?
Although price floors could support the industry, provide investor confidence and support some of the costlier underground mines, it would depend what that mechanism would even look like.
Ultimately, I don't think they'll be necessary, we completed a pre-feasibility study with detailed cash costs; those were well below current prices. There needs to be some real-world economics. Certainly in China given how much material they've been mining for decades, their own cash costs are increasing – so Western projects are comparatively competitive.
The US is operating at roughly maximum tungsten scrap-recycling capacity, and so the US tungsten scrap export controls imposed just a few months ago have left some overhang of scrap. How do you view export controls and scrap playing into the current market dynamics?
US export controls on tungsten scrap demonstrate the metal's strategic importance but have not aided in increasing domestic sodium tungsten supply because US processing capacity is capped.
Recycling tungsten will contribute to supply, but cannot replace new primary mining. The overall Western shortfall extends well beyond what scrap recycling can cover, but we need to be processing as much scrap as possible.
Additionally, more primary units will be required to fill in where recycled tungsten is not usable, chiefly in defense. We are projecting increased demand from the defense sector, which will further highlight the need for primary supply.
What do you view as your biggest hurdle in achieving production?
Our biggest hurdle is on personnel, we have incredible support from the government in terms of finance and permits.
The government in power understands the importance of domestic production, so it is really on personnel. At the moment, there's lots of competition with other critical minerals projects for the available experts.
But otherwise we are well positioned and close enough to attract talent from Reno and Las Vegas, Nevada.
