Article from miningnews.com 03 October 2024 MINERSEQ cracks...

Article from miningnews.com

03 October 2024

MINERS

EQ cracks tungsten record as geopolitical heat rises

Increased strategic metal production comes as US-China tensions escalate

Tungsten miner EQ Resources is continuing to talk up the strategic importance of growing production from its mines in Australia and Spain amid rising geopolitical tensions between China and the US.

EQ delivered a record production of 53,876 metric tonne units (10kg) of tungsten metal for the September quarter, a rise of 31% quarter-on-quarter.

The December quarter appears set to be even stronger, with a 51% increase reported for the month of September at 20,721mtu concentrate. Daily production records were set at the Mt Carbine mine in Queensland, producing 641mtu, while Barruecopardo in Spain delivered 518mtu.

CEO Kevin MacNeill said Mt Carbine's grades continued to rise with the deepening of the Andy White open pit, while upgrades at the Barruecopardo plant were improving recoveries.

Increasing production at a time when supply constraints have been brought into sharp focus could work out well for EQ, particularly given China's increasing move to slap export bans on a range of commodities it dominates, such as gallium, germanium and antimony.

Tungsten is already on the restricted list, and there are concerns China could soon ban exports entirely.

At the same time, the US government is now enforcing an additional tariff of 25% on Chinese tungsten products.

It follows May's decision by the US Department of Defence to stop acquiring tungsten from China and Russia despite its strategic stockpiles of the metal being low.

"China controls more than 80% of global tungsten output, and in the past 15 years, the Western world had only brought four tungsten mines into operation. Two of them are operated by EQ Resources", MacNeill said.

Another is Group 6 Metals' Dolphin mine on Tasmania's King Island. Group 6 is currently seeking to raise capital to improve its operations.

McNeill said while EQ was still ramping up production, its run rate had already reached a level equivalent to 17% of the last five years' average monthly tungsten imports into the US, compared with China's 27% market share.

"We are actively pursuing cooperation and funding opportunities not only domestically but also through US and EU agencies. EQ's positioning with two operating mines in the Western world is perceived as a unique value proposition that gains interest from policymakers", MacNeill said.

In recent weeks, EQ has strengthened its position in the US through a potential A$30 million, five-year offtake agreement with US-based tungsten manufacturer Elmet Technologies, potentially providing a pathway into the downstream space.

Elmet is described as the only 100% US-owned producer of pure tungsten and related tungsten alloys. It also has significant molybdenum interests.

Tungsten is trading near six-year highs at about US$350/t.

In addition to its military applications, the metal is used in the automotive and aerospace industries.

EQ shares were up 2% today at A5.4c, capitalising the miner at $121 million.

The stock has traded between 3.2-7.5c over the past year.