Supply shock in war’s critical metal will last far beyond Iran conflict

The Iran war caused well-documented price increases and shortages of a range of products on which Americans depend. Of course, in addition to oil and natural gas, petrochemical products and everything derived from them (e.g. plastics) and helium are among the raw materials that are besieged due to the closure of the Strait of Hormuz. Yet there is another element that has seen its influence. price increase At a time when supplies were gradually decreasing due to the war, but the shock would not ease even if the Bosphorus was reopened. The large amount of US ammunition used in the war, combined with the weapons sent to Ukraine, caused many US-based organizations to search for tungsten.

It’s understandable if you didn’t know you needed tungsten. While tungsten’s role in weapons is driving the current crisis, its impact extends to more mundane corners of American life, from the dentist’s chair to fishing. It goes unnoticed for most people, but not for those who are critical in the supply chain.

“The topic of tungsten comes up in almost every vendor conversation,” said Mark Vena, CEO and principal analyst at SmartTech Research. “Tungsten is a metal that no one talks about until missiles, factories and machine shops need it all at the same time,” Vena said, noting that it connects warfare, manufacturing, electronics, aerospace, electric vehicles and everyday vehicles. Vena called the current situation “an ugly knot in the supply chain” and said the tungsten crisis is a reminder that despite all the advances in artificial intelligence and technology, the economy is still dependent on physical materials.

As in other cases involving rare earth materials in recent years, China is at the forefront of the supply chain bottleneck. China is the dominant supplier, controlling 80% of the world’s tungsten, although its production is in decline. It imposed export restrictions in February 2025, citing national security concerns, and continues to subject the metal to sanctions. strict export controls.

according to latest USGS dataIn 2024, global tungsten production reached approximately 81,000 metric tons, with Vietnam ranking second after China. The US produces almost none of it domestically.

A new era in Kazakhstan and tungsten mining

China’s major role in the market has attracted the attention of policymakers for years. In 2022, the US REESHore Act was introduced and Banning the use of Chinese tungsten in military equipment Starting in 2026, but it was never signed into law. The Department of Defense’s new sourcing rules are coming into effect, which will require new metal sources.

New tungsten resources in the works include a mining operation being established for untapped reserves in Kazakhstan by Cove Kaz Capital, a portfolio holding of mining company Cove Capital. “The tungsten industry is experiencing unprecedented market conditions,” said Pini Althaus, Chief Executive Officer of Cove Kaz Capital. “The reason for the increase in prices is the decrease in supply due to the decrease in global tungsten reserves as a result of the wars in Ukraine and Iran,” he said.

Cove Kaz Capital has attracted attention for another reason: Both Eric Trump and Donald Trump Jr. are investors in a company that plans to merge with it.

As China’s tungsten production declines after decades of mining and extraction, it is more often buying tungsten concentrates from other countries at high prices to feed its own processing plants and for its own defense, industrial and energy needs. At the same time, U.S. demand for tungsten over the next five to ten years will require a large number of new tungsten mines in production around the world, Althaus said.

Kazakhstan is just one front in the emerging tungsten war. One of the most aggressive players Almonty IndustriesA Canada-based miner completed Phase 1 commissioning of the Sangdong Tungsten Mine in South Korea’s Gangwon Province in March, marking the deposit’s return to production after more than 30 years. The company also operates a producing mine in Portugal. These will ultimately help alleviate supply issues.

The United States is also on Almonty’s radar, according to CEO Lewis Black. “There has been no tungsten mining in the United States for 30 years,” Black told CNBC late last year. He said it was difficult to develop domestic mines on the scale of some operations abroad, but that pursuing U.S. supply “makes sense for customers and for defense work.”

Both the United States and Europe are innovating weapons and ammunition that require tungsten for armor-piercing ammunition, among other uses. But concurrent wars have depleted tungsten stocks, forcing U.S. tungsten refiners to feed their facilities with a limited combination of scrap, recycled materials and ore concentrate, Althaus said. Wars are projected to increase shortages in overall tungsten supply as defense demand increases.

“All things considered, the United States will need greater sustained and scaled supplies of tungsten through the 2030s,” Althaus said.

Cove Capital is working with market estimates that production as high as 20,000 metric tonnes per year will be needed in the US alone. National Defense Stock And Project Vault.

Cove Kaz’s tungsten project in Kazakhstan is expected to produce 12,000 metric tons per year at full scale. Department of Defense sourcing rules The law, which will come into force on January 1, 2027, will restrict the use of tungsten metal powders and heavy alloys mined, refined and produced in China.

Cove Kaz’s investment is based on the belief that Kazakhstan’s tungsten reserves will have a lifespan that will transcend many political cycles. The project’s two open-pit tungsten deposits are expected to operate for 50-plus years, or as Althaus frames it, “the next ten to twelve American presidencies.”

Planned production will equal roughly 15 percent of current annual mine production worldwide, considering the approximately 80,000 metric tons currently produced.

“Our goal right now is to complete the engineering studies, mine and refinery construction plans, and break ground within the next eighteen months,” Althaus said, but did not give a timeline for when the project would reach full-scale production.

Kazakhstan agreement, Donald Trump Jr. and came under scrutiny for investing in a company named Eric Trump. Skyline Builders Group In August 2025, the company plans to focus on critical material supply chain investments from a legacy construction firm based in Asia. The company merged with Cove Kaz Capital on April 30 and plans to trade as Kaz Resources sometime thereafter agreement It will be completed in late 2026 or early 2027. The exact size of their investments is unknown.

Lawmakers and watchdog groups are examining deals involving the president’s family. Rep. Robert Garcia (D-Calif.), ranking member of the House Oversight and Accountability Committee, called The Defense Department inspector general has been assigned to investigate multiple national security-related transactions involving Trump family members. To date, the Ministry of Defense has not responded.

A Trump Organization spokesman said the Trump family had no involvement in the merger and was always a passive investor with no management role in Skyline Builders Group.

The U.S. government has weighed in on the search for additional tungsten resources, committing up to $1.6 billion to the Cove Goose project through the Export-Import Bank and the U.S. International Development Finance Corporation. $900 million commitment last November and $700 million commitment in February of this year. FT, which first reported Cove Kaz Capital recently reported on the Trump family’s investment in the mining project. Another $400 million was requested From the Ministry of Defense.

The government was laying the groundwork for tungsten investment before the second Trump administration began. In its acquisition announcement, Cove Kaz noted that the US Departments of Commerce and State have supported Kazakhstan’s efforts to access tungsten resources, including the Biden and Trump administration, since 2023. Cove Kaz also touched on a joint venture between President Trump and Kazakhstan President Kassym-Jomart Tokayev, which includes tungsten mining assets.

No matter what happens in Kazakhstan, tungsten shortages will continue to be felt until new supplies become available, which will affect the Americans in one way or another.

“For most consumers, tungsten is kind of invisible to them. But it keeps the machinery and tools that keep the economy going, so they’re going to feel that way, too,” said Evan Mills, a financial analyst who specializes in commodity and metals investments at wealth-planning firm Scholar Advising.

“Right now these Western countries are at war, they need tungsten more than ever – whether it’s for weapons or basic industrial tools – and it just so happens that the largest distributor decided at that very moment to stop distribution. That’s the real concern,” Mills said. “There’s still a good amount of this stuff out there; it’s getting harder and harder to get it from a country that no longer wants to distribute it.”

Mills said consumers don’t buy tungsten directly, so the shortage won’t show up directly on their balance sheets. “But when there are delays in construction, when construction costs go up, when the machinery behind mining, drilling and production becomes more expensive to run, they will definitely pay the price,” Mills said, referring to drill bits, saws and industrial equipment.

He said very few people looked at these critical materials until they became a serious national security threat, adding “this is it.”

D., an assistant professor of chemistry at Lebanon Valley College who specializes in polymer chemistry. Elizabeth Sterner said everyday items, including dental drills, were affected by the tungsten shortage. Those in the dentist’s chair may be especially grateful for tungsten. “Tungsten carbide-tipped dental drills make them more efficient and cause less discomfort to patients,” Sterner said.

Although tungsten isn’t directly in your smartphone, computer, or car, it plays a role in their construction; Tungsten carbide drills are used to fabricate circuit boards in most electronic devices.

If you’ve cast your line at your favorite fishing hole and come back with a good pull, thank tungsten. “Tungsten weights are used in fishing because they are less toxic than lead weights,” Sterner said.

“The prices of all these products may increase in the event of a tungsten shortage due to both tungsten shortage and the unavailability of tungsten carbide machining tools to produce these products,” he added.