China, tungsten and a supply shock in metal critical for war that will last far beyond Iran conflict

• Global tungsten production reached approximately 81,000 metric tons in 2024, with China and Vietnam accounting for over 80% of supply while the U.S. produces virtually none domestically
• A Kazakhstan mining project backed by $1.6 billion in U.S. government financing is expected to produce 12,000 metric tons annually (15% of current global output) but has drawn scrutiny due to investments by Donald Trump Jr. and Eric Trump
• New U.S. Department of Defense sourcing rules effective January 1, 2027 will restrict use of tungsten from China, while American demand is projected to require 20,000 metric tons annually well into the 2030s

Summary: China, Tungsten Supply Shock and Critical War Metal Shortage

Key Facts and Figures

Tungsten, a critical metal for military and industrial applications, faces severe supply shortages driven by simultaneous conflicts in Ukraine and Iran. Global production reached approximately 81,000 metric tons in 2024, with China controlling dominant supply but reducing exports since February 2025 due to national security concerns.

Supply Chain Dynamics

China produces the majority of global tungsten, with Vietnam a distant second. The U.S. produces virtually none domestically, creating strategic vulnerability. Current U.S. demand projections estimate 20,000 metric tons needed annually through the 2030s for defense and industrial use.

Companies and New Sources

Almonty Industries (Canada-based) operates tungsten mines in South Korea and Portugal, with its Sangdong Mine returning to production after 30 years. Cove Kaz Capital plans a major Kazakhstan mining project expected to produce 12,000 metric tons annually (15% of current global output) with a 50+ year lifespan.

The U.S. government committed $1.6 billion through the Export-Import Bank and Development Finance Corporation to support the Kazakhstan project, which has attracted scrutiny due to investments by Donald Trump Jr. and Eric Trump.

Market Implications

New Department of Defense sourcing rules effective January 1, 2027 will restrict Chinese tungsten use. The shortage affects defense munitions (armor-piercing ammunition), industrial tools, electronics manufacturing, dental equipment, and construction. Analysts warn consumers will experience impacts through construction delays, increased manufacturing costs, and higher prices for electronic devices and industrial equipment. Expert Mark Vena describes the situation as "one ugly supply chain knot" requiring 5-10 years and multiple new mines to resolve.