- Almonty Industries (AII) is re-developing the historic Sandong Mine in South Korea, which it believes could become one of the most crucial tungsten deposits on the planet
- Tungsten has recently been touted by researchers at Cambridge University as a key component of the new age of lithium-ion batteries designed to charge faster, output more, and last longer
- Not only this, tungsten has wide uses across the global defence and military sectors, meaning demand for the metal is increasing amid rising geopolitical tensions
- China currently dominates the global tungsten supply, but Almonty’s Sandong mine will offer an important alternative source of the metal
- Almonty shares last traded at 74 cents on October 6
Lithium continues to hog the electric vehicle spotlight, but there’s a new player in the battery game.
In 2018, Cambridge University published astonishing data about lithium batteries combined with niobium tungsten oxides. The data showed that this tungsten-infused battery could charge faster, output more, and last up to 10 times longer than conventional battery tech used in electric vehicles.
On top of this, these batteries are safer, too.
It’s placed tungsten — a metal already primed for a spike in demand amid rising geopolitical tension around the globe — on the grand stage of the EV game, and investors are beginning to put their money where this metal is.
ASX-listed Almonty Industries (AII), through the historic Sandong Mine in South Korea, believes it is re-developing one of the most crucial tungsten deposits on the planet.
A new era of lithium-ion batteries
In 2016, researchers from Cambridge’s Yusuf Hamied Department of Chemistry founded Nyobolt, a company specialising in end-to-end ultrafast-charging batteries.
The company found that two complex niobium tungsten oxides could intercalate large amounts of lithium, even when the oxides were just microns in size.
After years of research and refinement, Nyobolt raised £50 million (A$83.6 million) in funding in August 2022 to enter a stage of manufacturing at scale.
While this major funding alone is certainly nothing to scoff at, it’s pertinent to note that the cap raise was led by HC Starck Tungsten Powders, a subsidiary of Masan High-Tech Materials — one of the largest suppliers of tungsten on the planet.
Tungsten is a key component of Nyobolt’s game-changing battery
Importantly, Nyobolt CEO Sai Shivareddy, who co-founded the company with Professor Clare Grey, said Nyobolt’s niobium tungsten oxide chemistry was the first of its kind.
“The company’s technology builds on a decade of battery research led by Professor Grey,” Mr Shivareddy said in an interview with Auto Futures.
“We are building on this to provide end-to-end fast-charging solutions applicable to power tools, home appliances, electric vehicles and industrial robotics to decrease charge time from hours to minutes, maximising uptime and productivity.”
The young technology means tungsten is in a prime position for explosive growth as a commodity, and Almonty Industries has positioned itself in the right place at the right time to capitalise on this growth.
Almonty reigniting the tungsten market
South Korea’s Sandong mine was once the tungsten darling of the world, and Almonty has spent years getting ready to restore the mine’s once-prestigious status.
Almonty has already received massive support for its redevelopment of the Sandong mine from major industry players around the world looking for a consistent source of the metal.
Moreover, further to its direct support of the reinvigorated Sandong mine, the Korean government this year allocated 1.56 trillion won (A$16.7 billion) of its annual budget to its Ministry of Trade, Industry and Energy — a 21 per cent increase from the previous year.
Alongside Almonty Industries, South Korea is ramping up its international trade capabilities to meet the expected rise in demand for its key commodities.
As for non-government industry support, Almonty has locked in a 15-year offtake agreement with the multi-billion-dollar Plansee Group that guarantees US$590 million cashflow, as well as a senior project finance loan from German state-owned KfW IPEX-Bank to finance 70 per cent of the CAPEX throughout the project’s development.
Further to all this — and particularly relevant following the Nyobolt research and funding — Almonty announced this year it was investigating the construction of a vertically-integrated nano tungsten oxide processing plant in South Korea.
Not only would this supply the metal to the South Korean battery anode and cathode manufacturing industry, but it would also position Almonty as one of the only tungsten suppliers in the world ready to meet the demands of the new era of ultrafast-charging batteries.
But wait, there’s war
Yes, demand for tungsten is set to increase as battery tech evolves. However, tungsten has only recently been placed among the ranks of ‘battery metals’.
The metal has seen wide use in a range of industries over the past century, not least of all in the defence and military sectors
In fact, during World War II, tungsten became one of the most sought-after materials by both sides of the conflict due to its strength, incredibly high melting point, and subsequent use as a component in special-purpose steels, armour-piercing shells and reinforced tank armour.
To be clear, tungsten still has its uses in a range of other important sectors, including in lightbulbs, x-ray machines, aircraft and the manufacture of semiconductors.
But historically, demand for tungsten has always risen in times of war and geopolitical tension.
Just like we’re seeing in Eastern Europe — and, truly, around the world — today.
Yet, unlike in the past, the world now needs a much more diverse supply of the metal.
China’s production stranglehold
China currently dominates the global tungsten production market, accounting for over 80 per of global production and exporting tungsten primarily to the United States, Japan, and South Korea, according to the Observatory of Economic Complexity (OEC).
China is also a top-ten importer of the metal, buying most of what it doesn’t produce from Japan, with South Korea, Germany, and the US also contributing to Chinese tungsten imports.
While South Korea once produced massive amounts of Tungsten from the Sandong mine, the relatively peaceful 80s and 90s saw commodity prices dip and South Korea’s government make the call to scale down production from the mine and shift focus to manufacturing.
When Sandong eventually closed in 1994, China snapped up the significant market share it enjoys today.
Now, the same military conflict in Eastern Europe that has prompted a steady climb in demand for tungsten has also highlighted exactly why China’s monopoly on tungsten production could present a major threat to the rest of the world.
A crisis of energy and a cautionary tale
Russia is fighting as much using its commodities as it is using its military.
It’s one of the world’s largest oil producers and in 2021 supplied around half of the European Union’s gas — which means Russia has a lot of leverage in negotiations with surrounding countries.
For example, the Kremlin announced back in April it would begin cutting off gas to countries like Poland and Bulgaria, who were vocal opponents of the invasion of Ukraine and also relied heavily on Russia for their gas.
While other European countries voice their disapproval of Russia’s military action, many felt powerless to help under the threat of having their energy supply cut off like in Poland and Bulgaria.
The Kremlin has since shut down a major pipeline and told the rest of Europe it will resume gas supply once the EU and its allies lift sanctions recently put in place against Russia.
Russia was — and still is — leveraging its massive share of the energy market to keep other countries from interfering in its dealings, lest they get plunged into cold and darkness.
It puts Russia’s geopolitical opponents in a sticky position because they have come to rely on the energy produced by a country whose actions they openly oppose.
When viewed in this context, China’s dominance of the tungsten market could have dire implications for its opponents.
Strength in diversity
The bottom line is this: with global geopolitical tensions reaching their boiling points and global militaries standing to attention, the world needs more tungsten.
More than this, however, the world needs more suppliers of tungsten: China’s continued dominance of the market is a threat to surrounding nations in and of itself.
Almonty Industries, through the mighty Sandong Mine in South Korea, has positioned itself in a prime spot to offer a solution to both these problems.
The company listed on the ASX in August 2021 and, in doing so, offered Australian investors the chance to support the disruption of the tungsten market.
Tungsten has flown under the radar for years, but history tells of its importance in times such as these.
And all this is before one even considers the massive implications of a new age of new-and-improved, tungsten-powered lithium-ion batteries.