- Mike O"Mara
DOD Proposes Trade Restrictions
Department of Defense Update - Tungsten
The Department of Defense released a proposed rule on April 27 that would restrict the importation and exportation of certain materials with North Korea, China, Russia and Iran. The goal of this proposed rule is to not enrich these countries for certain natural resources but also to develop a domestic supply of materials. Important to the Darwin Mine is the restrictions on
Tungsten. The Tungsten restriction will be implemented on January 1, 2026. According to the World Mining Congress, as of December 2021, China has the largest deposits of Tungsten in the world with 83%. The decrease in available Tungsten is expected to have a material effect on the price of Tungsten. Historically, Tungsten has spiked significantly higher during supply restrictions and cratered when exports have materially risen. In the chart below from Frontiers in Chemistry, the large increases and decreases in prices are easy to see.
· 1910’s and 1950’s – World War 1 and Korean War
· 1980’s – China significantly increased production which caused major drop in price
With over 80% of the global Tungsten supply no longer available to US manufacturers, Darwin’s importance in the supply chain will be significantly enhanced. In 2012, the International Tungsten Industry Association has highlighted Darwin as one of the key deposits of Tungsten in the United States.