Tungsten: One Of The Heaviest Metals & A Hard Act To Follow

November 19, 2012

Global demand for the industrial metal is growing robustly, but keep an eye on China.

 

It was back on Dec. 16, 2008, that we at HardAssetsInvestor published our first short piece on tungsten: Tungsten: Heavy Metal (Including Cello). Much has happened in the world of tungsten since then, so a brief update now seems appropriate.

The fundamentals for tungsten remain the same. Tungsten is important because it is heavy. In fact, tungsten is one of our heaviest metals.

Metal

Density (g/cm3)

Iridium

22.65

Osmium

22.61

Platinum

21.09

Rhenium

21.02

Neptunium

20.45

Plutonium

19.82

Gold

19.30

Tungsten

19.25

Approximate density at room temperature.

 

And it is hard. As carbide compounds (W2C and WC), tungsten carbides are some of the hardest available.

Furthermore, in addition to its exceptional properties (high thermal and electrical conductivity, very high thermal creep resistance and very high moduli of compression and elasticity), the following three superlatives can be added:

  • After carbon, tungsten has the highest melting point of any element: 3,422°C or 6,192°F (its boiling point, 5,555°C or 10,031°F, is about as hot as the sun's surface)
  • Tungsten has the lowest vapor pressure of all metals
  • Tungsten has the lowest coefficient of expansion of all metals

 

End-Uses

Over the past four years, the major end-uses of the metal remain unchanged:

Cemented carbides – or hard metals, which are nearly as hard as diamonds and used in a wide range of applications from carpentry tools to hot rolls for rolling mills in the steel industry, dies, punches and cutting tools for stone, cast iron, non-ferrous alloys and steel

Steels/Alloys – particularly high-speed steels, for tool bits and drill bits

Mill Products – such as metal rods, sheet and wire, contacts in electronics and light filaments, together with tungsten alloys. These last include such super-alloys as Hastelloy (see Chromium: Not Just Fancy Trim) and stellite, both of which are used in turbine blades, tungsten-heavy metal alloys and tungsten alloys with titanium, tantalum or rhenium and dispersion-strengthened tungsten composites.

Other applications, such as specialist chemicals for lubricants, pigments and glazes, photo-chromic glass, various catalysts, X-ray machines, fire-proofing compounds, and beryllium (see Beryllium: Bombs And More (Much More), in nuclear reactors.

 

Primary End Uses of Tungsten – 2010

Source: International Tungsten Industry Association (ITIA)

 

 

The International Tungsten Industry Association (ITIA), on its website, notes some other interesting future possible applications for tungsten:

 

Some Developments In The Last Four Years

Tungsten has been in the news quite a bit over the past several years.

Not so long after publication of our first tungsten piece back in 2008, the metal featured quite visibly in the U.S. administration's review of what to do with National Defense Stockpile. And, indeed, in the Reconfiguration of the National Defense Stockpile (NDS) Report to Congress of April 2009, not only was there quite extensive discussion of tungsten's importance, one of the appendices (E) consisted of a "Department of Commerce Analysis of Tungsten," albeit based on pretty antiquated data.

With the increasing interest in strategic (or critical) metals—call them what you will—not only in the U.S., but elsewhere around the world, it was perhaps not surprising that the metal also came under the special scrutiny of the British Geological Survey (BGS).

When the BGS published its first "Risk List" of metals back in September 2011, tungsten featured prominently in its press release, but, more importantly, in the list itself. Along with antimony, the PGMs and mercury, tungsten scored 8.5 on the "Relative supply risk index." By September of this year, the metal had moved up to second place, behind the REEs, both with scores, now, of 9.5 on the "Relative supply risk index."

In the period ending March 13 of this year, concerns voiced in the U.S., the EU and also Japan, about China's dominant (and possibly abusive) position in the tungsten market had obviously not fallen on deaf ears in government because, on that day, all three "formally requested dispute settlement consultations with China in the World Trade Organization (WTO)," over export restrictions not only on rare earths and molybdenum but also tungsten.

It is actually quite difficult to discover exactly why both molybdenum and tungsten specifically were included in the complaint. On the face of it, the reason would appear to be steel and the importance of both metals in its production. (As noted already in the HAI piece on the WTO referral: "In the U.S. anyway, as far back as 2010, the United Steel Workers (USW) had, in its Section 301 trade petition dealing with 'alternative and renewable energy products,' addressed the issues of both tungsten products and rare earths. Both the USW and, on the other side of the industry, the American Iron and Steel Institute, were among the first bodies to 'applaud' the action against China at the WTO.)"

However, a simpler, and perhaps more obvious, answer may lie in one particular global shift in its end-use that has occurred over the past several years: Tungsten is now being used much more than it was in cemented carbide or hard metals. That is, it has become increasingly important to the process of making things, as opposed to being a constituent of the things being made.

China continues to dominate tungsten production globally.

 

Tungsten: Mine Production 2007-2011 (tonnes)

Source: United States Geological Survey

 

 

But it is also, now, a net importer, for domestic consumption, of the metal, both as carbide and as concentrate. According to figures published by Metal-Pages, in the first quarter of this year, China imported 659 tonnes of tungsten carbide (with Japan and the U.S. being its largest suppliers) and 2,234 tonnes of tungsten concentrates (with its largest suppliers being Russia and Canada).

Since 2009, Chinese domestic demand for primary tungsten has significantly outstripped that of the rest of the world, and there is no reason to believe that as the country continues to move more toward adding value to products, and away from trade in raw and unprocessed materials, its appetite for tungsten will diminish any time soon.

 

China's Increasing Domestic Demand vs. RoW Demand (Primary Tungsten)

Source: Ormonde Mining PLC (from ITIA data, 2011)

 

And as if China's position as a tungsten producer was not secure enough, back in early June, the country announced the discovery of the world's largest tungsten mine with "proven reserves of 1.06 million tons and an estimated economic value of over 300 billion yuan, in Wuning county, Jiangxi Province." (However, little has been heard of it since.)

While this Chinese mine may be the largest in the world, the world's fourth-largest (with "Measured, Indicated and Inferred" mineral resources of some 401,400 tonnes) is, surprisingly, down in the English West Country at Hemerdon, near Plymouth, in Devon. If and when Wolf Mineral Limited's mine finally gets into production, it should account for around 3.5 percent of the metal's global supply.

But with the announcements the company made in the early part of this year regarding not only environmental issues, but also both funding and offtake agreements, things look encouraging.

For those who may not have found just the basic supply and demand figures enough to persuade them to take at least a modicum of interest in the metal, perhaps the announcement of Warren Buffett-related interest in the metal back at the beginning of the year may have piqued their interest.

On Feb. 28, Woulfe Mining Corp. and its 100 percent-owned tungsten/molybdenum South Korean subsidiary, Sangdong Mining Corp., announced that they had "entered into agreements for a strategic arrangement with IMC International Metalworking Companies B.V. ("IMC") and certain of IMC's affiliates."

Buffett's Berkshire Hathaway owns some 80 percent of IMC, one of the world's largest metal-working products holding companies. During the year, the "arrangement" progressed quite constructively, and as recently as Oct. 9, Woulfe announced the "First Blast of Production Portal of Sangdong Project."

One of the most interesting developments in the world of tungsten over the past several years has been the significant increase in the recycling of tungsten scrap.

According to USGS figures (in the U.S. anyway), in 2007, "the tungsten contained in scrap consumed by processors and end users" represented approximately 31 percent, and in 2010, 37 percent, "of apparent consumption of tungsten in all forms." In 2011, this figure had jumped to some 55 percent—really a significant increase. Going forward, this figure looks set to rise further.

 

 

Major Tungsten Projects

A number of different quoted companies, of varying sizes and outside of China, are looking to seize the opportunities offered by the health of, and continuing demand in, the tungsten market. Some of the larger projects include:

Company

Ticker

Project Name/Area

Country

Carbine Tungsten Limited

CNQ:AU

Mt Carbine

Australia

Deutsche Rohstoff AG

DR0:GR

Wolfram Camp

Australia

EMC Metals Corp

EMC:CN

Springer

USA

Hazelwood Resources Ltd

HAZ:AU

Cookes Creek

Australia

King Island Scheelite Limited

KIS:AU

King Island

Australia

Largo Resources Ltd.

LGO:CN

Currais Novos

Brazil

 

 

Northern Dancer

Canada

Ma San Group Corporation

MSN:VN

Nui Phao

Vietnam

North American Tungsten Corporation Ltd

NTC:CN

Mactung

Canada

Northcliff Resources Ltd

NCF:CN

Sisson

Canada

Ormonde Mining PLC

ORM:LN

Barruecopardo

Spain

Thor Mining PLC

THR:LN

Molyhill

Australia

Uzbekistan-Korea* Tungsten

-

Sautbay

Uzbekistan

Venture Minerals Ltd

VMS:AU

Mt Lindsay

Australia

Vital Metals Ltd

VML:AU

Watershed

Australia

Wolf Minerals Limited

WLF:AU

Hemerdon

England

Woulfe Mining Corp

WOF:CN

Sandong

South Korea

*The Korean company is Shindong Resources Co. Ltd

 

Other companies currently involved with tungsten include:

Company

Ticker

Almonty Industries Inc

ALL:CN

Avrupa Minerals

AVU:CN

Blackheath Resources Inc

BHR:CN

Happy Creek Minerals Ltd

HPY:CN

Heemskirk Consolidated Limited

HSK:AU

Malaga Inc

MLG:CN

Playfair Mining Ltd

PLY:CN

Tasmania Mines Limited

TMM:AU

 

For those interested in Chinese tungsten companies, quoted companies involved in the metal include:

Company

Ticker

China Molybdenum Co Ltd

3993:HK

Chongyi Zhangyuan Tungsten Co Ltd

002378:CH

Minmetals Development Co

600058:CH

Xiamen Tungsten Co Ltd

600549:CH

 

From Here Forward

On the face of it, the outlook for tungsten, despite the current economic climate, looks encouraging, with demand likely to continue to grow in years to come. The plethora of tungsten projects and companies involved in exploration for the metal appears to reflect this view.

It would, however, be prudent to bear in mind history, and China's continuing dominance, for the present, of the tungsten market.

Yes, the WTO action by the U.S., the EU and Japan seeks to redress what they perceive as unfair restrictions on trade in the metal. But because of its position in the market, there is no knowing whether China might not, as it has before, flood the market with cheap APT and WO3 concentrate, thereby scuppering miners, processors and exploration companies alike.

While it might be considered heretical so to say, it could be well worth keeping an eye on what is going on in the rare earth "pace" at the moment and how things pan out there. Events therein could provide salutary lessons for future developments in the tungsten "space."

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