Tough as tungsten

Tungsten is doing the hard work to keep Australian industry running. Its role in metal hardening makes it essential for equipment that needs to endure extreme wear and tear, like that used across mining and defence. From windmill blades to microchips, our industrial base would grind to a halt without tungsten. This threat is looming, as there are concerns over the stability and access to supply of the critical mineral. Production is dominated by China, which controls about 83% of the global market. Russia accounts for another 5% and a small percentage comes from North Korea. Outside of this trio, there are very few significant producers, with supply concentration potentially creating a bottleneck for the many industries that rely on tungsten.

This is a sizeable problem. According to SkyQuest, the tungsten market size was valued at almost $8b (US$5.13b) in 2023, with continued growth keeping the mineral at pace. Growing markets introduce supply concerns. Alongside this, the issue of supply concentration is pronounced, with an expanding number of export control measures on critical minerals being introduced. At the start of 2025, China imposed stricter export controls on critical materials like tungsten, significantly impacting global supply chains. The move is part of a broader trend in China’s approach to critical minerals, following similar restrictions on other essential materials like antimony, gallium, and germanium, all of which have dual-use in military and civilian applications.

With intensifying trade tensions, countries are looking for alternative tungsten sources. One such source is Australia. Australia ranks second in the world for tungsten resources, with an estimated 15% share of world resources according to Geoscience Australia. With the resources already here, Australia just needs the legs to lift operations of the ground. In the third instalment of our Critical Minerals Outlook series, we spotlight the recently announced Critical Minerals Strategic Reserve and the projects that will harden Australia’s position as a giant in the global tungsten market.

Critical Minerals Strategic Reserve

The Federal Government recently announced plans to establish a Critical Minerals Reserve with the goal of securing a domestic supply of critical minerals that will shelter us from geopolitical disruptions like those seen out of China earlier this year. The reserve will build on Federal Government investment in critical minerals through two new mechanisms: national offtake agreements and selective stockpiling. National offtake agreements involve the establishment of voluntary contractual arrangements in which the Federal Government will acquire agreed volumes of critical minerals from commercial projects or establish an option to purchase at a given price. The aim of this is to maintain security over these assets as part of the strategic reserve. Selective stockpiling will establish Australian stockpiles of certain key critical minerals produced under offtake agreements as required. According to the Federal Government, the reserve will be focused on a subset of critical minerals that are most important for Australia’s national security and the security of our key partners. As its holdings mature, the Strategic Reserve will generate cash-flow from sales of offtake on global markets and to key partners. The Strategic Reserve will also accumulate stockpiles of priority minerals when warranted by market conditions and strategic considerations, but it is anticipated that these will be modest and time-limited in most cases.

Minerals held by the reserve will be made available to domestic industry and key international partners, with the mechanism and allocations to be determined by the Federal Government and subject to consultation.

The Federal Government will make an initial investment of $1.2b in the reserve, including through a $1b increase in the existing Critical Minerals Facility. Industry has weighed in with mixed responses to these post-election promises. Minerals Council of Australia (MCA) chief executive Tania Constable says there’s no doubt the global mining and processing supply chain is under pressure. “China continues to aggressively expand its capacity in critical mineral processing —including nickel, lithium and rare earths — and dominate the value chain,” she said. “At the same time, escalating costs in Australia are eroding our competitiveness, pushing potential investment offshore just when we should be capitalising on global demand.

“Australia has what the world needs in abundance, and our companies are already providing critical minerals directly into international markets, including the US, South Korea and Japan.” But whether a Critical Minerals Strategic Reserve is the best approach remains to be seen, says Ms Constable. The MCA acknowledges that a reserve may increase Australia’s chances of limiting the impact of US tariffs, but says this initiative is certainly not without domestic risk and may impact the commercial viability of operations through continued downward pressure on commodity prices. “The objective and merits of a Critical Minerals Strategic Reserve remain unclear and this initiative must be evaluated against other opportunities to leverage our mining industry,” Ms Constable said. “These include support for projects that deliver regional development and jobs and committing to the Junior Minerals Exploration Incentive would support about $725m of much needed greenfield exploration expenditure over the next 10 years. “We must focus on the fundamentals that will give Australia back the edge over other mining nations. That means lower energy prices, a windback of draconian industrial relations laws, and faster environmental approval times. “These changes would make it easier for companies to invest in Australia, without the need for taxpayer-funded incentives and government intervention in markets.” Australia’s real advantage lies in securing end-to-end supply chains, building strategic partnerships with like-minded countries, and connecting Australian mines to international manufacturers, according to the MCA.

“That means co-investing with trusted allies to build technical capability at every stage: from raw materials and concentrates to oxides, metals, and final products,” Ms Constable said. “Security of supply is essential, but it’s required at the end of the supply chain, not just at the beginning. That’s why Japan and Korea are already working with Australian miners to lock in long-term commercial contracts.” CME chief executive Rebecca Tomkinson says she looks forward to genuine and transparent consultation on the implementation of election promises and other ways to support the sector that underpins the national budget. Ms Tomkinson says well-designed industrial policy could position WA as a trusted and stable supplier of rare earths and other critical minerals as the globe scrambles to diversify supply chains. “The Critical Minerals Strategic Reserve is a potentially important avenue to unlock investment in Australia’s rare earth reserves, which are the third largest in the world,” she said. “However, it is vital any plans for stockpiling contain safeguards against applying continued downward pressure to commodity prices that might impact the viability of existing or prospective Australian operations. “The issues impacting our sector have been clearly articulated. Energy prices are too high and rising. Project assessments take far too long. Australia’s corporate tax settings are uncompetitive. Industrial relations changes have broken the crucial connection between productivity and wages growth. “While Future Made in Australia supports like production tax incentives and the Green Iron Investment Fund are important and welcome, they cannot compensate for flawed fundamentals. “Australia is well placed to capture a new wave of resources investment to underpin another generation of prosperity — but that wave will pass us by completely if we fail to get the basics right.” AMEC chief executive Warren Pearce echoed similar sentiments. “If done right this could help Australian critical minerals projects secure the financing they need to build new mines,” Mr Pearce said. “Critical minerals are vital for national security and our national interest. So we expect critical minerals most closely related to these areas to be a key focus of this reserve. However, there are a range of critical minerals and critical mineral by-products that should be considered. “This is key to obtain international investment confidence from our global partners and to secure supply chains of the future. “We’re still waiting on [the Federal Government] to announce their plan for the JMEI to continue. Clearly, it’s a no brainer to invest in exploration, the lifeblood of the resources industry. “Australia’s exploration industry is struggling from a dearth of investment. With fears of a global recession worsening the situation, greenfields exploration activity has plummeted.”

DeltaPearl Partners managing director Craig Wilson says Australia has an excellent record of exporting its processing capability. “There’s an opportunity for governments in Australia to nudge industry further along that value chain, but at the moment most of the world’s capability in this space isn’t in Australia,” he said. So where should we look? Mr Wilson says Queensland’s North West Minerals Province may hold the keys to this future. “A full court press by the [Federal] Government in the North West Minerals Province could almost single handedly deliver their various critical minerals objectives,” he said. “It’s just so fertile. I often think if this was in Saudi Arabia or China for example, they would just draw a big circle around it and throw a heap of resources at it to make it happen. “But [Australia’s] economic policy settings are quite standoffish. “The map of the North West Minerals Province basically contains all the minerals on the critical minerals list, but they’re all still in the ground, so a full court strategic press that takes place at scale — not in a ministerial press release — could say ‘we’re open for business.’ “We have all the ingredients needed to do that, but the political will isn’t there.”

Tungsten’s prospects

The Australian Trade and Investment Commission’s (Austrade) Critical Minerals Prospectus showcases three investment-ready tungsten projects in Australia: Thor Energy (75%) (ASX: THR) and Investigator Resources’ (25%) (ASX: IVR) Molyhil Tungsten Project, EQ Resources’ (AS: EQR) Mt Carbine tungsten mine and Tungsten Mining’s (ASX: TGN) Mt Mulgine tungsten project.

Molyhil Tungsten Project

Overview: The Molyhil deposit is located about 300km northeast of Alice Springs in the Northern Territory. The project anticipates 1,850tpa of tungsten concentrate and 850tpa of molybdenum concentrate. Thor’s 2018 feasibility study was based on a single, simple open-pit mine, with a life of seven years. Molyhil ore will be processed on-site to produce tungsten, molybdenum, and copper concentrates using industry standard ore sorting and flotation processing techniques. The adjacent Bonya deposits, about 30km from Molyhil, host JORC 2012 mineral resources of tungsten and copper, with potential to extend the life of Molyhil for several years.

Status: The project was awarded major project status by the Northern Territory Government in 2020. Thor’s feasibility study in 2018 confirmed Molyhil as a technically and economically viable project producing tungsten, molybdenum and copper concentrates for export/downstream processing. Following a resource verification drilling program, Investigator completed an updated mineral resource estimate in May 2024 resulting in a 150% increase in tonnes, a 20% increase in tungsten trioxide grade and a 200% increase in contained tungsten within the measured resource component. A revised scoping study is to be completed as a next step towards development of this project. Environmental approvals are in place, along with an agreement over the project area with Native Title Arrapere Group and Central Land Council.

Potential: Detailed gravity geophysical surveys completed in 2024 have identified a number of potential Molyhil style targets. Investigator will drill the four highest priority targets during 2025, with the objective of identifying near-mine mineralisation.

Mt Carbine

Overview: The Mt Carbine tungsten mine in Queensland anticipates production of 5,300tpa of tungsten concentrate with a minimum mine life of nine years.
The 2023 Mount Carbine Bankable Feasibility Study demonstrates significant growth
potential with only 17% of the JORC-compliant Mineral Resource utilised in current
open-pit mine plan.

Status: Acknowledged for its commitment to sustainability winning the 2022 AMEC Environment Award, Mt Carbine is a fully permitted brownfield operation currently in production, undergoing a three-phase expansion initiated in 2019. Phase 1 included mining ore from the historic low-grade stockpile (LGS) and early works upgrades.

Phase 2 includes open pit mining and processing plant upgrades to expand capacity.

Open pit mining from the 5.93mt in-situ ore reserves commenced in Q2 CY23 and efficiency and capacity enhancements are progressing. The 2023 bankable feasibility study (Phases 1 & 2) is based on the currently defined reserves feeding an average of 2mtpa open pit and historic LGS ore to the processing plant producing an average of 5.3ktpa 50% tungsten trioxide tungsten concentrate for about 10 years. Phase 3 includes a scoped, 10-year underground mine with drilling and trial mining planned for 2026. Queensland Government co-funded the ongoing sampling and ore sorter trials at the Wolfram Camp prospect.

Potential: Backed by the [Federal] Government Critical Minerals Accelerator Initiative, EQR’s strong ESG commitment, fast-growing supply and planned downstream growth path makes it an attractive globally-balanced investment.

Mt Mulgine

Overview: The Mt Mulgine tungsten project sits on three granted mining leases, located in the Murchison region of WA. The Project will include open-pit mining and processing of material via gravity concentration and flotation to produce tungsten, molybdenum
and by-product concentrates.

Status: A prefeasibility study (PFS) completed in January 2021, confirmed the technical and financial viability of the Mt Mulgine tungsten project. Since completion of the PFS, work has focused on streamlining the project, now expected to produce significant volumes of tungsten and molybdenum, along with a by-product concentrate of copper-gold-silver. Further metallurgical test work and resource development has supported a recently completed strategic engineering study, defining several positive development options for the Project based on processing and extraction of both tungsten and molybdenum. There is no Native Title or Native Title claims and archaeological and ethnographic surveys have not identified any significant heritage issues over the project area. Tungsten Mining is progressing regulatory approvals and environmental studies with the intention of submitting an EPA referral in 2025.

Potential: A revised flowsheet and updated cost estimates have been completed reinforcing the strong value proposition of the project as a long-term, low-cost producer of several key critical minerals including the only primary production of molybdenum in Australia, and one of several active tungsten producers.