Bright future for Tungsten

Given its diverse applications, tungsten is still very much a strategic metal for most countries, especially due to the fact that the majority of it comes from China, where export quotas are in place. Securing tungsten supply outside of China is thus imperative. However, though there are a few companies either gearing up for tungsten production or producing it already — including Wolf Minerals (ASX:WLF), Largo Resources (TSXV:LGO), North American Tungsten (TSXV:NAC), Carbine Tungsten (ASX:CNQ) and Almonty Industries (TSX:AII) — investment in tungsten projects is significantly down. That lack of tungsten investment is partially due to the fact that lately tungsten prices have been down around the $370 metric ton unit mark, which, while reasonable, isn’t necessarily ideal for companies looking to kickstart their projects. In addition, tungsten is also not a very glamorous metal like gold; some have even gone as far as to call it misunderstood. That said, the future looks bright for tungsten, as Mark Seddon highlighted in a recent Mining Report interview. He estimates that new supply is bound to enter the market only in mid-2015, with production shortages resulting in rising prices until at least 2016 to 2017. Seddon believes that to counteract that upcoming shortage, “retty much one major new project [will need to] com[e] onstream every year.” Unfortunately, the impending lack of tungsten supply could impact the military, especially given that the United States has sold off most of its tungsten. So, in the spirit of preparedness, investing in tungsten is likely to prove a strategic move.

Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.