Australia Funds $10 Million for Tungsten Mine to Break China's Grip

Australia funds10 million Australian dollars for tungsten mine in breaking China's near-monopoly on the critical minerals required to build weapons, electric vehicles and fighter jets, with $10 million in government funding to reopen a tungsten mine on King Island. The Tasmanian government will provide the 10-year loan to ASX-listed King Island Scheelite and talks are under way to secure an additional $15 million in federal government support.

China is the world's largest exporter of tungsten, with tungsten ore output accounting for approximately 83% of the world. The Australian government, which is willing to "kick the iron" on the issue of trade with China, has also wanted to change the industrial structure after discovering that trade with China was blocked last year. It plans to inject 10 million Australian dollars to reopen the Golden Island, a tungsten deposit on King Island.

Tungsten is the second-hardest mineral known to man, behind diamonds, and is used in drill bits for the mining industry, tunneling machines and cutting equipment critical in the manufacture of vehicles and aircraft.

Tungsten, rare earths and lithium were among 35 minerals deemed "essential" to US economic and national security by the Trump administration in 2018. The new Biden administration has continued this focus on removing China from the country's manufacturing supply chains, providing $US30 million ($40 million) in funding last month for Australian rare earths miner Lynas to build a processing plant in Texas.

The US does not have an operating tungsten mine, while Australia has only a small working deposit in Tasmania. Prime Minister Scott Morrison mentioned critical minerals during his address to the National Press Club on Monday as part of $1.5 billion in new funding for the government's Modern Manufacturing Strategy.

Golden Island belongs to the southern island state of Australia-Tasmania. This tungsten deposit named "Dolphin Tungsten Mine" is owned by a company listed on the Australian Stock Exchange and King Island Scheelite. The Tasmanian government will provide this company with a 10-year loan. In addition, the company may receive 15 million Australian dollars government assistance from the Australian Federal Government, and relevant negotiations are ongoing.

A total of 85 million Australian dollars will be required to restart the deposit. Excluding government financing and subsidies, the remaining startup capital companies will be raised through the stock and bond markets. Nobel Group, a futures trader, and Sandvik Group, a Nordic machinery manufacturer, have acquired 70% of the deposit's production capacity.

"Our priorities are clear. We're investing, we're encouraging others to do the same," he said. The executive chairman of King Island Scheelite, Johann Jacobs, said the Dolphin project would be one of the highest-grade tungsten mines in the world.

"Tungsten is a strategically significant metal and a key input to industries that are vital to national security. We note that several Western governments have recently identified a crisis in the supply chain for critical minerals, particularly tungsten, he added. The reopening of the tungsten mine is important for Australia to break the near-monopoly of China in the critical mineral.

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