Overall Industry Structure:  The tungsten industry may be considered to comprise three principal divisions:

    Primary Tungsten Producers – the mines which mine and carry out primary mineral processing to produce tungsten mineral concentrates

    Secondary Tungsten Processors – the processing plants which take the mineral concentrates and process them into a number of tungsten powders, including ammonium paratungstate (APT), suitable for use in downstream metal/alloy manufacturing.  These powders are often referred to as “intermediates”

    Tertiary Tungsten Product Manufacturers – the plants which produce finished tungsten metal, tungsten alloys, tungsten tools and other tungsten end products.

Traditionally there has been some degree of vertical integration within the industry, with some common ownership of secondary processing and tertiary manufacturing facilities, but this integration rarely extended upstream to the primary producers, the miners. However, the expansion of the Chinese economy and the demand for tungsten has, apparently, resulted in considerable vertical integration in the tungsten industry in China, whether through common ownership or contractual arrangements, with a move away from exports of concentrates and into downstream processing and manufacturing. This pressure towards vertical integration within China and an apparent desire to secure long term concentrate supply, has resulted in various large Chinese companies investing in Western tungsten projects. This activity in China has started to affect the industry outside China, with a number of strategic mergers, acquisitions and investment within the Western tungsten industry over the last two years.

Tungsten Products:  The usages of tungsten result in an industry structured to produce various categories of products:

    Approximately 50% of tungsten is used in the production of hardmetals, or cemented carbides; these are cutting, drilling and wear materials formed from tungsten carbides and cobalt, and occasionally other minor metals such as titanium, tantalum and niobium

    Some 17% of tungsten is used to produce specialist steel alloys, such as high speed steel, heat resistant steel and tool steels, all largely utilised in metal cutting applications and specialist engineering applications

    In the region of 15% of tungsten would be used to make “mill products”; the mill products would comprise tungsten rod, sheet and wire, electrical contacts, etc…

    The balancing 18% of tungsten is used by the chemical industry and in other specialist applications.

World Tungsten Metal Production:  The total yearly tonnage of mine tungsten metal production is very small relative to base metals, the more recent estimates being:

    83,000t  of primary tungsten metal (W) production – equivalent to 105,000t of tungsten trioxide, WO3 (79.3% W)

The breakdown of this production would be circa:

    70,000t/ year W from Chinese mines  -  of the order of 84% of World production

    7,000t /year W from Western orientated economies  -  circa 9%

    6,000t/year W from other communist or CIS countries  -  circa 7%

Tungsten Pricing:  Prices for tungsten concentrates produced by mines and the intermediate tungsten powers produced by the secondary processors are quoted in metric tonne units (mtu). An mtu consists of 10kg of WO3, as contained within the particular material in question, concentrates or APT (this relationship conveniently results in the fact that a 1% resource grade equates to 1 mtu). The two materials for which prices are quoted widely and reported in mtu of WO3 are:

    tungsten trioxide, WO3, (containing 79.3% tungsten metal), as the critical constituent in the minerals in mine concentrates

    ammonium paratungstate, APT, the main secondary downstream product made from concentrates.

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Tungsten Minerals: The only two tungsten minerals of any importance are two tungstates or oxides, their relative values being determined by the measure used to determine mine ore grades and mine concentrate grades, i.e. the tungsten trioxide or WO3, content:

Scheelite, a calcium tungsten oxide, CaWO4  -  contains 80.5% WO3

Wolframite, an iron-manganese tungsten oxide, (Fe, Mn)WO4  -  the iron rich variety, called Ferberite, contains 76.3% WO3; the manganese rich variety is termed Hubnerite and contains 76.6% WO3

Tungsten Deposits: Tungsten principally occurs in four main geological settings, as:

    Skarn deposits - where granites are intruded into limestones

    Vein deposits - in quartz veins adjacent to granites, as a series of larger separate veins

    Sheeted vein deposits - as multiple, narrow, closely spaced, quartz veins forming large sheeted vein systems within and adjacent to granites

    Pegmatites - very coarse segregations/concentrations of specific minerals at the margins of granites

Metals and Minerals Associated with Tungsten: Tungsten mineralisation is frequently associated with minor quantities of sulphides, usually iron sulphides, but occasionally with economic quantities of copper sulphides; it may also have specific associations with other potentially economic minerals:

    Tungsten and tin in vein and sheeted vein deposits

    Tungsten and gold in sheeted vein deposits

    Tungsten and magnetite in skarn deposits

    Tungsten and molybdenum in skarn deposits

    Tungsten and lithium, tantalum, niobium and tin in pegmatite deposits

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Tungsten Metal (W):  From a mining and metal industry perspective, tungsten falls into a loose grouping of around 20 metals termed the minor metals (the other metal groupings being; the precious metals, the base metals and the platinum group metals (PGMs)).  Tungsten is unique in having a combination of relatively extreme properties compared to other metals; its properties include:

    a very high melting point, 3422°C (5700°C, boiling)  -  highest melting point of all metals

    a very dense, heavy metal, 19.25 g/cm2

    an extremely strong, wear resistant metal; has a hardness close to that of diamonds - highest modulus of elasticity and highest tensile strength of all metals

    a thermally and chemically stable metal, with high thermal conductivity - lowest coefficient of expansion of the metals

    a high electrical conductivity

    a relatively inert metal which does not oxidise readily, is extremely corrosive resistant and relatively acid resistant and is deemed environmentally benign.

Tungsten Uses:  As a consequence of tungsten metal’s properties, tungsten alloys are used in various application areas:

    Tungsten, due to its hardness and ability to withstand heat, is very suitable as a critical component of cutting tools used to drill or cut other metals, concrete or rock (e.g. household drill bits, metal fabrication tools, dentists tools, etc..)

    These attributes also make tungsten alloys suitable for critical temperature sensitive and wear resistant machinery components (e.g. engine valves, ball-point pen tips, turbine blades, snow tyre studs)

    These wear and temperature resistant properties, in combination with tungsten’s electrical conductivity, also make tungsten ideal as a critical temperature resistant component in electronics and as a contact point in electrical circuits (e.g. LCD panels, TV tubes, laser printers, window heating wires, car horns, electrical switch gear)

    Tungsten’s high density properties also make it suitable as a weight or counterbalance in specific machinery applications (airplane flaps, mobile phone vibration systems, crankcase balancing weights, golf clubs and as an environmentally acceptable substitute for lead shot in cartridges).

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Tungsten is a metal with unique properties making it an essential component in many industrial applications. Critical properties include - very high melting point, very high density, hardness close to diamond, thermally and chemically stable, excellent conductor, and environmentally benign.

The most important use is as tungsten carbide in hardmetals, used mainly for industrial drilling and cutting tools. Secondary uses are in electronics and specialist steels.

China accounts for over 85% of world tungsten mine production; western world supply is very limited.

USA, Europe and Japan consume ~55% of world tungsten, but produce only ~5%.

Chinese domestic demand has increased, and China has moved from a net exporter to net importer of tungsten concentrates. This increase in Chinese demand, combined with increased controls by the Chinese Government on their domestic tungsten industry and tungsten exports.

Concerns over security of supply of tungsten concentrates to western processors and industry end-users. This along with other factors have resulted in the EU categorising tungsten as a "critical raw material".

Chinese domestic consumption of tungsten is forecasted to grow by 5-8% annually between 2012 and 2016.

Growth markets for tungsten are still being identified, such as nickel-tungsten alloys that could replace chrome plating and nickel-tungsten alloys that could replace gold-nickel plating.

Tungsten, with essential applications in industry, aerospace and military, is a strategic commodity.  Stockpiles exist in the US and Russia. China and Japan have also indicated that they intend to build stockpiles and there has been some discussion of the possible creation of a European stockpile.

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