Almonty Industries Building World’s Largest Tungsten Mine

As one of the most crucial mining revitalization projects for the tungsten industry and South Korea, Almonty Industries Inc.'s (AII) Sangdong tungsten mine will fundamentally change the global supply chain for this strategic metal once it puts into production. Currently, South Korea imports 94.7 percent of its tungsten from China, which produces more than 80 percent of the world's total.

Sangdong tungsten mine, one of the largest tungsten deposits in the world, is awaiting recommissioning after a 25-year hiatus, and AII has been working steadily on the restart of the mine to ensure pre-production requirements.

South Korea's Ministry of Trade, Industry, and Energy announced in July 2021 a set of supportive measures to stimulate the local production of materials, parts, and equipment. The proposal commits up to 7 trillion won by 2022 for the implementation of these measures, including bank loan subsidies and exemptions from fees required for certification of industrial standards. The Korean government has allocated 1.56 trillion won for the annual budget of the Ministry for 2022, a 21 percent increase over the previous year, demonstrating strong support for Korean industry and trade.

Lacking a diversified and secure global supply of tungsten, Almonty received support from traditional institutions to enable it to successfully secure financing for the Sangdong project.

The company has signed a 15-year off-take agreement with Plansee Group, guaranteeing US$590 million in cash flow, and has secured a senior project finance loan from Germany's state-owned KfW IPEX-Bank to finance 70 percent of the capital expenditures throughout the project's development.

Tungsten is a critical metal for the production of semiconductors. Companies such as Apple, Tesla, IBM, Boeing, Samsung and HP rely on tungsten to a large extent. Plansee Group has maintained a supply agreement with Apple for many years and has supplied NASA with components for the production of oxygen. As a specialized financing institution for the German and European export industry, KfW IPEX-Bank is a powerful institution that provides tens of billions of loans for projects all over the world.

“The battery and semiconductor industries offer tremendous additional growth potential for the tungsten market, particularly for Almonty in South Korea," said Lewis Black, president and CEO of Almonty Industries. “As the world's largest per capita consumer of tungsten, and with the world's largest semiconductor and battery manufacturers located in Korea, we are very pleased to be able to invest in this key metal's production, which will bring additional value to Sangdong tungsten mine and Almonty."

According to a report released in 2018 by the Korea Institute of Industrial Economics and Trade, semiconductor manufacturing is considered the industry with the lowest self-sufficiency rate. And tungsten is a critical element used in semiconductor production.

"There are 400 to 600 steps in the entire manufacturing process of semiconductors, requiring hundreds of materials and equipment, and Korea's self-sufficiency rate is only 27 percent, with its heavy dependence on foreign supply chains," the Ministry of Industry assessed in a 2021 report.

This situation is not limited to Korea, but also to the demand for tungsten in the United States, which consumes an estimated US $600 million worth of tungsten annually. And the Sangdong tungsten mine being built by Almonty Industries would ease the pressure to some extent.

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