China’s antimony export controls shake up tungsten industry

BEIJING — China’s latest export controls have rattled insiders in the essential minerals industry, and some worry Beijing will leverage its dominance of the global supply chain in unprecedented ways.

China’s Ministry of Commerce announced Thursday that antimony export controls will take effect on September 15. Antimony is used in bullets, nuclear weapons production, and lead-acid batteries. It can also harden other metals.

“Three months ago, there was no way (anyone) would have thought they would have done this. It’s pretty conflicting about that,” Lewis Black, CEO of Canada’s Almonty Industries, said in a phone interview. The company said it is spending at least $125 million to reopen a tungsten mine in South Korea later this year.

Tungsten is almost as hard as diamond and is used in weapons, semiconductors and industrial cutting machines. Both tungsten and antimony are on the US critical minerals list and less than 10 elements apart in the periodic table.

“My industry is now thinking that this is much closer to home than graphite,” Black said, referring to China’s previous export controls. Last year, Beijing, the world’s biggest producer of graphite, said it would impose export permits for the key battery material amid scrutiny from foreign countries worried about its dominance.

“I can’t explain this move and I think it has shaken a lot of people in this sector, my clients, and they don’t have a plan B, which China is very aware of. It hasn’t been around for 30 years. years,” he said.

“There was always a balance … they were never armed because they could create this snowball of escalation,” he said.

China accounted for 48 percent of global antimony mine production in 2023, while the U.S. mined no marketable antimony, according to the U.S. Geological Survey’s latest annual report. The US has not mined tungsten commercially since 2015, and China dominates global tungsten supply, the report said.

“I think it’s the beginning of some export restrictions on a number of rare earth minerals,” Tony Adock, executive chairman of Tungsten Metals Group, said in a telephone interview. He said he found it hard to believe that China would limit only antimony.

“The way the (Chinese commerce ministry) statement was written, we extrapolated that to tungsten and other rare earths. It may not happen,” Adock said, noting that “tungsten is probably the most economically important.”

China’s Ministry of Commerce did not immediately respond to a request for comment.

The US has tried to restrict China’s access to high-end semiconductors, after which Beijing announced export controls on germanium and gallium, two metals used to make chips.

While tungsten is also used to make semiconductors, the metal, like antimony, is used in defense production.

“China has declining tungsten production, but tungsten is absolutely vital, far more than antimony, in military applications,” said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.

He expects China to put controls on tungsten exports by the end of the year, if not in the next month or two.

“During a situation where there’s a bit of a race to secure metals in case there’s some sort of flare-up of tensions, frankly we’re talking about the South China Sea or Taiwan, you want to have as much tungsten as possible,” he said. Ecclestone. . “But you also want the people on the other side to have as little tungsten as you possibly can.”

The United States is already keen to reduce its reliance on China for tungsten.

Starting in 2026, the US REEShore Act bans the use of Chinese tungsten in military equipment. This refers to the Restoration of Essential Energy and Onshore Rare Earth Security Holdings Act of 2022.

The House Select Committee on Strategic Competition between the United States and the Chinese Communist Party announced in June a new task force on U.S. critical minerals policy.

Ecclestone said last week the niche antimony trading market noticed that the US price to buy the metal from Rotterdam was exponentially higher than the price for delivery from Shanghai. That’s after antimony prices continued to rise even after pandemic-related shipping disruptions ended, he said.

“There is a suspicion that the Pentagon has replenished its reserves with certain metals, and especially antimony, because it needs antimony for ammunition,” said Ecclestone, who founded the mining strategy firm in 2003.

The US Department of Defense did not immediately respond to a request for comment.

China is acting more in retaliation “to what it sees as an intrusion into its national interests,” Markus Herrmann Chen, co-founder and managing director of China Macro Group, said in an email.

He pointed out that the third plenary meeting of China’s policymakers in July “proposed a completely new policy goal of better coordination of the entire mineral value chain, perhaps reflecting the increased importance of the supply of ‘strategic mineral resources’ to both business , as well as for geoeconomic interests”.

As China seeks to secure its national security, companies in the U.S. and elsewhere are looking to take advantage of a developing opportunity.

“Energy Fuels has been the largest supplier of uranium oxide in the U.S. for several years, supporting domestic nuclear power production,” Mark Chalmers, Colorado-based Energy Fuels president and CEO, said in a statement. He said the company is creating a line of U.S. rare earth products.

“We recognized that our 40 years of experience working in naturally radioactive materials gave us a competitive advantage to duplicate China’s success in separating more (rare earth elements) from the abundant and cheap monazite,” Chalmers said, referring to se to a mineral from which the desired metals can be extracted.

It remains unclear whether China will proceed with a blanket implementation of the latest export controls.

“They don’t want to admit that this could escalate,” Black said. “But I don’t think China wants this to escalate either. The last thing you want to create is another crazy man (at) the start of the US election. Let’s see in a week if this is really a policy or not.”