Tungsten's Price Spike Is a Century-Long War Prediction Market: China Cuts Supply and It Goes Up Tenfold
Tungsten's supply-demand cycle works like a war prediction market: it spikes before wars and collapses after. China controls 80% of supply, and restarting old Western mines costs only tens of millions of dollars — yet financing is hard because there is no futures market.
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Every tungsten mine restart maps to a war
David Fickling points out that tungsten's history looks like a century-long war prediction market. Mine owners talk to tungsten traders, traders talk to defense contractors, and the latter are the first to place orders when war approaches. The Dolphin mine he visited opened during World War I, closed after the war, restarted before World War II, was saved by the Korean War, abandoned after the Cold War, and is now being restarted again because of war risk. This cycle shows that tungsten demand is highly correlated with war expectations, and is ignored in peacetime.
— David FicklingArmor-piercing rounds rely on tungsten's density, not hardness
Tungsten's military value comes from its density and melting point: its density is comparable to gold, and its melting point exceeds three thousand degrees Celsius, three times that of magma. Armor-piercing rounds use it to keep their shape and penetrate tank armor, while cluster munitions use tiny tungsten projectiles to create a rain of metal. Among non-military uses, 80% of tungsten goes into tungsten carbide tools such as drill bits; turbine blade alloys can contain up to 10% tungsten, used in jet engines, gas turbines and LNG compressors; and AI chips also use trace amounts.
— David FicklingStrategic minerals money comes from the Red Bull founder, not banks
The shareholder list for restarting the Dolphin mine reads like a heist movie: the Red Bull founder (Austria has a historical interest in tungsten), a shareholder in the US coal company Peabody Energy, a Caterpillar dealer who worked there in the 1960s, the Tasmanian state government, and even a crane rental company that took equity in lieu of debt. The company has almost no bank financing, with equity of only about A$7 million and cumulative investment of about A$77 million over twenty years — equivalent to four hours of Amazon's spending.
— David FicklingWithout a futures market, tungsten mines can't borrow
Tungsten has no futures market, and this is the fundamental obstacle to critical minerals investment. Without a forward price, miners cannot hedge costs, and banks cannot assess a project's bankability. Investor Alex Turnbull says the tungsten price could swing between US$300 and US$3,000 per metric ton unit, depending on whether China cuts supply. Since China accounts for 80% of global supply, any outside miner faces enormous price uncertainty and struggles to get loans.
— David FicklingA tenfold tungsten price rise is stockpiling, not necessarily demand
The tungsten price has risen from about US$300 per metric ton unit in 2022 to more than US$3,000 now, but the unit conversion is complicated: one metric ton unit contains about 7.93 kilograms of tungsten, so US$3,000 per metric ton unit works out to about US$400,000 per ton of tungsten. Joe's tungsten cube could therefore be stolen. Part of this price surge comes from stockpiling triggered by Chinese export controls; once the controls are lifted, speculative demand fades and the price could fall back.
— David FicklingTwenty years of strategic tungsten investment buys less than one missile
The investment scale of critical minerals is trivial compared with defense or AI spending. The Dolphin mine has absorbed A$77 million over twenty years, while one SAD missile costs about US$10 million. If the mine goes into production, it could supply about 2.5% of the global market, but after deducting China's 80% and North Korea's and Russia's 5%, that is equivalent to about one-sixth of the free-world market. A project with such low cost and high strategic value has gone unfunded for so long, highlighting a market failure.
— David FicklingWar has returned to attrition, and only then is tungsten valuable again
After the 1991 Gulf War, the West believed future wars would be won by technological overmatch and no longer needed tungsten, a material of attrition warfare. But the Ukraine war has lasted four years, and the battlefield has returned to the mass attrition warfare of the 20th century, making tungsten important again. If a Taiwan Strait conflict broke out, facing the world's largest manufacturing nation, the US would struggle to gain technological superiority as easily as it did in 1990, further highlighting tungsten's strategic value.
— David FicklingA floor price could save tungsten, or become an industry subsidy
David argues that encouraging non-Chinese tungsten supply requires a 3-5 year floor price so miners can finance against it. But the problem is that any mineral can be defined as critical — the US has already added metallurgical coal and copper to its critical minerals list, and some even worry about China controlling citric acid supply. If standards are loose, the US$12 billion Project Vault stockpile plan could become a channel for industries seeking price protection rather than a real solution to strategic mineral shortages.
— David FicklingIn their own words · checked verbatim
tungsten. You can look at it as a bit like a sort of century old missing prediction market for war basically
David Fickling6:07
it's about the same density as bold, but it also has this ridiculously high melting point but more than three thousand degrees celsius, so sort of three times hotter than lava, Tungsten will still be solid.
David Fickling8:07
sometimes it could be three he said, like tungsten, it could be three hundred dollars adrimetric ton unit, which is the unit the is, It could be three thousand, three hundred, three thousand each is a reasonable price for it.
David Fickling19:18
It's very similar to the selling down of the helium reserve. Yeah, which is just like which is like the numbers are it's so pennywise or whatever
David Fickling23:24
What you actually want is a fairly small group of minerals where there's a real strategic issue. And I think tungsten's one, I think rare to another, things like gallium, germanium. These are some of the crucial ones.
David Fickling31:32
Figures
| China's share of global tungsten supply | 80% | 13:14 |
| Global annual tungsten consumption | about 85,000 metric tons | 17:14 |
| Dolphin mine equity financing | about A$7 million | 13:14 |
| Dolphin mine cumulative investment over twenty years | about A$77 million | 13:14 |
| Tungsten price (2022 vs now) | about US$300 per metric ton unit → more than US$3,000 per metric ton unit | 19:18 |
| Price per ton of tungsten (at US$3,000 per metric ton unit) | about US$400,000 | 20:19 |
| Share of global market the Dolphin mine could supply | about 2.5% | 22:24 |
| Cost of one SAD missile | about US$10 million | 22:24 |
| Scale of the Project Vault plan | US$12 billion | 31:32 |
Glossary
- Ammonium Paratungstate (APT)
- An easily traded tungsten compound that can be bagged and shipped, and yields tungsten oxide when heated.
- Dry Metric Ton Unit (DMTU)
- The pricing unit for tungsten, containing about 7.93 kilograms of tungsten.
- Tungsten Carbide
- A compound of tungsten and carbon, extremely hard, used in tools such as drill bits.
- Ionic Absorption Clays
- Clays formed from weathered granite that can concentrate rare earth elements.
How to listen
Investors watching critical minerals supply chains, mining analysts, geopolitical researchers, and founders who want to understand the pricing dilemma of strategic minerals.
The opening chit-chat about Joe not being able to find a tungsten cube can be skipped, roughly 0:00-5:00.