[Knowledge of Tungsten] Tungsten Industry

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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