Lewis Black is currently a partner of Almonty Industries and has over 15 years of experience in the tungsten mining industry. From June 2005 to December 2007, he was chairman and chief executive officer of Primary Metals Inc. (“PMI”), a former TSX-V listed tungsten mining company. Black also formerly served as head of sales and marketing for SC Mining Tungsten, Thailand.
Russ Alan Prince: Why is tungsten so important, and how does Almonty Industries fit into the global supply chain of rare metals, particularly tungsten?
Lewis Black: Tungsten is the most important metal most people know nothing about. Once more valuable than gold, it is consumed in every facet of the economy. Scientifically considered an “alien metal” because it doesn’t conform to the parameters exhibited by other metals, it has the highest melting point (6,192 °F) and highest tensile strength of any metal in its pure form. Nevertheless, it is vital in the production of military hardware and defensive weaponry, as well as being a key component in the production of semiconductors and microchips at a time when demand is rising in the automobile industry for tungsten oxide battery applications.
Currently, the tungsten market is dominated by China and Russia, which control almost all of the world’s supply. With an estimated 10% of global tungsten production, Almonty is the “last man standing” outside of China and Russia, making it a critical player in the industry.
In the coming years, tungsten alloys will experience the fastest growth of any major product category, stimulated largely by increasing aerospace manufacturing demands. Since many tungsten mining operations shut down in the 1990s primarily due to low commodity prices, knowledge and experience in the mining and processing of this difficult commodity have been hard to come by. We are fortunate that one of our tungsten mines in Portugal has been in operation for 126 years, giving us a knowledge base on tungsten processing five generations deep.
Prince: What is your outlook on the future demand for tungsten, and how is Almonty poised to capitalize on this trend while creating value for investors?
Black: The global demand for tungsten is forecasted to rise annually (3-7% per annum, according to the British Geological Survey) and is predicted to outstrip available supply, which will place continued upward pressure on prices in the near term.
Almonty is in the process of re-opening the Sangdong Mine in South Korea, which was the leading global producer of high-quality tungsten products for more than 40 years while the Korea Tungsten Mining Company operated it. The Sangdong Mine hosts one of the largest tungsten resources in the world and has the potential to produce 50% of the world’s tungsten supply ex-China output.
The likelihood of additional sources of tungsten being discovered or coming online is minimal. Most tungsten reserves are in locations that, unfortunately, are not practical for development. There are no operating mines in North America and only a few in Africa.
Prince: How does Almonty plan to mitigate the potential geopolitical risks in the global supply chain of rare metals?
Black: That tungsten has the potential to be affected by geopolitical risk goes without saying. Both the U.S. Congress and the EU have recognized this factor by declaring tungsten to be a critical raw material due to its limited supply and great economic importance.
Of particular concern geopolitically, around 12% of all Tungsten is used for defense purposes and the construction of modern high-tech weaponry. This makes many nations nervous as they face the possibility, underlined by the current Russia/Ukraine war that they may need to obtain this crucial material from a potentially hostile nation.
Approximately 90% of the current tungsten supply comes from the less-than-transparent jurisdictions of China, Vietnam and Russia. On the other hand, Almonty’s tungsten mining operations are all located in Western-style democracies—South Korea, Spain and Portugal. Almonty provides a secure source of Tungsten that is not tied to geopolitical risks. By highlighting this advantage, Almonty can establish itself as a reliable and trustworthy supplier of tungsten to the many industries that rely on this metal.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
