Chris Ecclestone from Hallgarten (UK) has started research on Guardian Metal Resources - a tungsten deposit in Nevada. In his research piece he makes some interesting comments about tungsten. The following are some statements made. I've selected taken statement from the research paper.
Globally, there is little pipeline of new projects in the Tungsten space.
Tungsten has been highlighted by the EU, Canada and the USA as a strategic mineral. Tungsten is used industrially in cutting tools and has status as the prime military metal. This has prompted sharply renewed interest in restocking supplies and reestablishing non-Chinese supply-lines in this critical metal for Western defense and industry.
If we had to choose a metal to crown as the military metal par excellence it would undoubtedly be Tungsten for its usage in shells and in armour-plating to resist said shells. Tungsten’s essential industrial and military place has been well known since the 1940’s. During WW2, Sweden, Canada and Iberia were important producers of the critical military metal.
What makes Tungsten, the key military and industrial metal? It is used in making bulletproof vehicles, armored tanks, and other kinds of protective equipment designed to withstand the high-speed impact of bullets. This is due to the hardness of Tungsten which can be further enhanced through alloying to yield stronger composite materials.
It is used in making armor-piercing rounds. These are designed to pierce through protective armor and vehicles designed to be bulletproof. Tungsten can tolerate high levels of shock anddoes not easily shatter.
It is used in making high-speed cutting tools. These tools are usually made of high-speed steel,and they cut much quicker than ordinary carbon steel. Tungsten’s ability to withstand high temperatures makes it indispensable in fabricating these tools and when cutting at such high speeds.
Tungsten is also used in the manufacturing of rocket and aircraft parts. It is instrumental in manufacturing parts like engines because of the high temperatures they must withstand. Tungsten has a high thermal resistance and can withstand high temperatures without defect.
In March 2022, the Departments of Energy, State and Defense executed a memorandum of agreement to launch an effort to include critical minerals necessary for the transition to clean energy alongside those needed for defense purposes.
China & Tungsten Tungsten, in theory, should be a bellwether of industrial activity, more than virtually any other metal, as it is directly levered into machine-tool manufacturing as the swing factor in its demand (the relatively non-variable part being lighting uses). However, the “spoiler” here is China which has long-distorted the Tungsten market, much as it has distorted the pricing mechanisms in so many other metals.
Now we have a situation where military and industrial demand is recovering making it harder for China to maintain low prices (to maintain its dominance). Moreover, China’s attempts to overrun the machine tool sector through its Tungsten dominance have put Western manufacturers of this equipment on notice that they need guaranteed non-Chinese supplies to evade predatory Chinese manouevres. New protection measures such as tariffs and import restrictions by the U.S. should help protect domestic production.
Ormonde Mining came to grief on Saloro in Spain and the asset passed, through private equity hands, to EQ Resources (who have revived Mt Carbine in Queensland).
For the first time since 2010 there now exists a perfect window of opportunity for Tungsten developers to catch the attention of investors, as industrial end-users and the Western military scramble to secure alternative, more reliable sources of supply.
Interestingly, there has been consolidation with the survivors owning more than one producing asset in some cases) Therefore, investors now have a choice of a handful of Tungsten producer (and developer) stories out there.
With the slow steady recovery in the price since mid-2017 there now exists a window of opportunity for Tungsten plays in the western world as end users look to secure alternative and more reliable sources of supply than China.
After years of low prices, with few new discoveries and developments, it is no surprise that Tungsten had fallen out of sight of investors and promoters (maybe not a bad thing). The mantra now though is Production, Production, Production. Having projects that are on the drawing board, and unlikely to leave it, does not charm funding out of the military in ANY country. This sets up a scenario where the nonserious will hopefully be relegated to a distant second place in the attentions of the markets.
The broader economic recovery should lead eventually to increased competition for Tungsten concentrates in the global market between Chinese and non-Chinese processors and consequently result in an increasing price structure for tungsten and its products in the future. A rise in prices of APT to over $400 in 2024 is not unthinkable and indeed likely if China restricts Tungsten exports.
In light of the attractive, and most probably lasting, confluence of events in the Tungsten space, Guardian Metals finds itself in the right metal, in the right place at the right time, a rare occurrence. (Scottm added - given Guardian has a deposit and nothing else. the words above are more suited to EQR who is growing production and signing US users).
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