VALUE: After Hours (S07 E33): Tungsten, Tin, and Critical Metals Risk

During their recent episode, Taylor, Carlisle, and Will Thomson discussed Tungsten, Tin, and Critical Metals Risk. Here’s an excerpt from the episode:

William: Well, tungsten is the rare earth metal store in more of a microcosm, and with easier processing and fewer mines. So, tungsten is used all over the industrial world mostly for making stuff harder. When you alloy steel with it, the steel gets harder and stuff like that. It’s used a lot in the defense industry. But demand grow is slow, GDP level growth until you hit a defense cycle where they need to ramp production and defense and stuff like that.

Tobias: What is tungsten useful? Just hardening?

William: Yeah. It’s got other use cases, but I think the largest use case tends to be as an alloying substance in creating harder metals, more heat-resistant metals. So, the fan blade, say in a natural gas turbine are going to be made from a tungsten alloy, although they make them from ceramics now also. There are substitutes. But any place you need something really hard that isn’t going to change shape, that is heat resistant, tungsten alloy of some kind is a viable use case for tungsten. So, lots of machine parts, anything spinning, stuff like that or the defense industry.

So, if you want to bomb an Iranian nuclear power plant, for example, your bunker buster is going to have a bunch of tungsten in it. Tungsten weighs a lot. It doesn’t change shape. You shoot a bullet at it and a bullet fractures into pieces. But there aren’t a lot of tungsten mines, because the growth has been slow. The processing has all shifted to China. And so, you’ve got the same rare earth story, except you do have tungsten smelters and refiners in the West and you just don’t have a lot of mines that are producing tungsten.

And so, tungsten, up until this year, there was really for all intents and purposes, only one publicly listed tungsten miner, Almonty. So, much like rare earths, up until a couple years ago, there was really only one rare earth publicly listed company and mines. We’re entering a cycle where it’s a critical metal, it’s in demand and you’ve got a couple of companies that are looking for and have great discoveries and are building mines in Western. That’s the other thing. They’re finding tungsten in places like Portugal, which is historically where tungsten has been mined. South Korea. There’s some in Canada, and a couple of other places in the United States that have it.

So, you’ve got a geopolitical need, you have a bottleneck, you have an underinvestment cycle. They happen to also be finding worthwhile economic deposits in the Western world. That doesn’t happen very often. So, that’s a nice mix. There are only a handful of publicly traded companies. So, if the press agent for tungsten gets better, [Jake laughs] they got to go find whoever it is, rare earths, the flood will be useful or productive forever.

Tobias: Yeah, the tungsten marketing boards got to get busy there.

Jake: Get their stuff together.

William: Yes, yes, yes.

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