Tungsten's Price Spike Is a Hundred-Year War Prediction Market: China Cuts Supply and It Goes Up Tenfold
Tungsten's supply-and-demand cycle behaves like a war prediction market: prices spike before wars and collapse after them. China controls eighty percent of supply, and the West could restart old mines for only tens of millions of dollars — but with no futures market, the projects are hard to finance.
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Every restart of a tungsten mine lines up with a war
David Fickling argues that tungsten's history reads like a war prediction market that has been running for a century. Mine owners talk to tungsten traders, traders talk to defence manufacturers, and the defence firms are the first to place orders when war is approaching. The Dolphin mine he visited opened during World War I and closed after it, reopened before World War II, was rescued by the Korean War, was abandoned after the Cold War, and is now restarting again because of war risk. That repeating cycle shows how tightly tungsten demand tracks expectations of war — and how thoroughly it is ignored in peacetime.
— David FicklingArmour-piercing rounds rely on tungsten's density, not its hardness
Tungsten's military value comes from its density and melting point: as dense as gold, with a melting point above three thousand degrees Celsius, three times that of magma. Armour-piercing rounds use it to hold their shape as they punch through tank armour, and cluster munitions use tiny tungsten pellets to create a rain of metal. On the civilian side, 80% of tungsten goes into tungsten carbide tools such as drill bits; turbine blade alloys can run as high as 10% tungsten, for jet engines, gas turbines and LNG compressors; and AI chips use trace amounts too.
— David FicklingThe money for strategic minerals comes from Red Bull's founder, not banks
The shareholder list behind the Dolphin mine's restart reads like the cast of a heist movie: the founder of Red Bull (Austria has a historical interest in tungsten), a shareholder in the American coal company Peabody Energy, a Caterpillar dealer who worked there back in the 1960s, the Tasmanian state government, and even a crane rental company that took equity in lieu of payment. The company has almost no bank financing; equity raised is only about A$7 million, and total spending over twenty years is about A$77 million — the equivalent of four hours of Amazon's outgoings.
— David FicklingWithout a futures market, a tungsten mine cannot borrow money
Tungsten has no futures market, and that is the fundamental obstacle to critical-minerals investment. With no forward price, miners cannot hedge their costs and banks cannot assess whether a project is bankable. The investor Alex Turnbull says the tungsten price could swing anywhere from US$300 to US$3,000 per metric tonne unit, depending on whether China cuts off supply. Because China accounts for 80% of global supply, any miner outside China faces enormous price uncertainty and struggles to get a loan.
— David FicklingThe tenfold price rise came from panic buying, not necessarily demand
Tungsten has gone from roughly US$300 per metric tonne unit in 2022 to more than US$3,000 today, but the unit conversion is awkward: one metric tonne unit contains about 7.93 kilograms of tungsten, so US$3,000 per metric tonne unit works out to about US$400,000 per tonne of tungsten. Which is why Joe's tungsten cube might get stolen. Part of that surge comes from the panic buying set off by China's export controls; once the controls are lifted and speculative demand fades, the price could fall back.
— David FicklingTwenty years of spending on a strategic mine costs less than one missile
The scale of critical-minerals investment is negligible next to defence or AI spending. The Dolphin mine has absorbed A$77 million over twenty years, while a single SAD missile costs about US$10 million. If it reaches production, the mine could supply about 2.5% of the global market — but once you strip out China's 80% and the 5% from North Korea and Russia, that amounts to roughly one sixth of the free-world market. That a project this cheap and this strategically valuable went unfunded for so long is a mark of market failure.
— David FicklingTungsten only becomes valuable again when war returns to attrition
After the 1991 Gulf War, the West concluded that future wars would be won by technological overmatch and that attrition-war materials like tungsten were no longer needed. But the war in Ukraine has now run for four years, the battlefield has reverted to twentieth-century mass attrition, and tungsten matters again. If conflict breaks out over Taiwan, the United States — facing the world's largest manufacturing nation — would struggle to secure a technological edge as easily as it did in 1990, which makes tungsten's strategic value more conspicuous still.
— David FicklingA floor price could save tungsten, or turn into an industry subsidy
David's view is that encouraging non-Chinese tungsten supply requires a floor price guaranteed for three to five years, so that miners can finance against it. The trouble is that any mineral can be defined as critical — the United States has already added metallurgical coal and copper to its critical-minerals list, and some people even worry about China's control of citric acid supply. If Project Vault's US$12 billion stockpile programme does not set strict standards, it could become a channel for industries seeking price protection rather than a genuine fix for 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 tonnes | 17:14 |
| Equity raised for the Dolphin mine | about A$7 million | 13:14 |
| Total spending on the Dolphin mine over twenty years | about A$77 million | 13:14 |
| Tungsten price (2022 vs now) | about US$300/metric tonne unit → more than US$3,000/metric tonne unit | 19:18 |
| Price per tonne of tungsten (at US$3,000/metric tonne unit) | about US$400,000 | 20:19 |
| Dolphin mine's potential share of the global market | about 2.5% | 22:24 |
| Cost of one SAD missile | about US$10 million | 22:24 |
| Size of the Project Vault programme | US$12 billion | 31:32 |
Glossary
- Ammonium Paratungstate (APT)
- A readily traded tungsten compound that can be shipped in bags 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 drill bits and similar tools.
- Ionic Absorption Clays
- Clays formed by weathered granite, capable of concentrating rare earth elements.
How to listen
Investors watching critical-minerals supply chains, mining analysts, geopolitics researchers, and founders who want to understand the pricing dilemma of strategic minerals.
The opening chat about Joe not being able to find his tungsten cube, roughly 0:00-5:00.