Right now, the US-Israel-Iranian war in the Middle East and the ongoing war in Ukraine are both increasing global demand for a critical mineral vital for national security and defence: tungsten.
While not the whole story of its appeal, tungsten has the highest melting point of any metal and is highly desirable in defence and technology applications, particularly high-performance aircraft and advanced munitions where extreme temperatures are created and controlled.
And on top of war demand depleting Western military tungsten stockpiles, these conflicts are also serving to disrupt the normal supply chains that transport the metal around the world.
And those factors compound what had been an existing problem before the war in Iran: China dominates the global tungsten market, effectively having monopolised the production and processing of the metal.
This gives the Red Dragon economy a market advantage that Western governments are seeking to mitigate by ramping up domestic supply capacity.
Threat to US military dominance
As far as the US government is concerned, this taxing of tungsten stockpiles represents a potential threat to America’s military, given tungsten is a crucial asset in the manufacturing of both ammunition and aerospace components.
(An example of the risk can be seen in the fact that China has effectively stopped exporting tungsten material to Japan as of August 2026.)
To be fair, China curbed exports of tungsten as early as February 2025, but it’s a similar move from the US in recent weeks that has really caught attention.
US curbs exports as critical minerals return on radar
As of early August 2026, the US has moved to ban exports of scrap tungsten to non-US suppliers – effectively keeping that class of tungsten products firmly in the US.
While the White House hasn’t said it, that comes at the same time that war demand has dwindled the USA’s tungsten stockpiles.
And, in a move similar to that seen in October of 2025, the Trump admin has recently unveiled a US$3B spending package to secure critical mineral supplies within the US, which coincided with another boost from the US government for an ASX-listed miner, Sunshine Energy Metals.
For those with memories able to cast back that far, you could fairly say critical minerals are back on the agenda.
Tungsten shortage underpins huge volatility
This is a familiar story in the current era, and you may be able to divine where this is going. Indeed, the world is currently grappling with a tungsten shortage – a problem’s that been growing since March this year.
As at early March, tungsten prices had climbed over 130% since January 1st of 2026. Heading into mid-August, depending on which tungsten products you’re looking at, some Chinese products have increased in price by an eye-watering 800%.
And with the US now seeking to access tungsten from non-Chinese sources to make up for a drawdown in supply borne from two major escalating wars, that puts US ally Australia in the spotlight – and investors are hunting out attractive opportunities to capitalise on the potential partnerships that could be made.
And there’s one Australian company that states it can produce tungsten here at home within the next nine months.
Enter ASX-listed Tungsten Mining NL (ASX:TGN), with a plan to kick off tungsten production as early as Q1 CY2027.
Near-term production underscores value prop
In the hunt for Australian tungsten producers, it’s hard to look past Tungsten Mining NL. The company has two potentially globally impactful projects within Australia – of foremost interest is the Watershed project in Queensland (QLD) from where production is slated to commence in Q1 of 2027.
Already up +220% across the last year as tungsten prices soar, TGN reflects an attractively priced development-stage tungsten mining company with a $300M market cap. But Watershed, set for imminent production, actually reflects the smaller of the company’s two projects.
Adding heft to the company’s project portfolio is the Mt Mulgine project in Western Australia (WA), which is one of the largest known deposits according to Tungsten Mining Chairman Gary Lyons. This, the company suggests, is a significant value driver the market hasn’t quite yet fully appreciated.
“Our Mt Mulgine project in Western Australia reigns as one of the largest tungsten deposits in the world with a first production estimate of early 2029,” Lyons told HotCopper.
“Together with Watershed, these two projects give us the perfect blend of speed and scale to deliver stakeholder value both in the near-term and across future years as well.”
For investors, whether Watershed starts producing in Q1 of next year will be seen as a litmus test for the company’s overall ability to deliver on the larger Mt Mulgine production plan set for the late 2020’s. Towards that latter end, a Mt Mulgine Pre-Feasibility Study (PFS) is due for release in Q3 of 2026, meaning investors will soon have that first-look study to pore over.
But it’s progress at Watershed being carried out by the Tungsten Mining NL team that stands forth as the nearest value catalyst for the stock.
Major drilling underway on-site
When it comes to preparing Watershed for Q1 2027 tungsten production, it’s worth noting that drill rigs are currently on-site spinning at the same time this report was prepared.
Early in Week 33 of 2026, Tungsten Mining unveiled a major drilling campaign kicked off comprising both reverse circulation (RC) and diamond-tipped drill rigs for a total 21,000m drill run sniffing around known high-grade mineralisation. Meanwhile, the diamond drills will probe deeper underground to further assist in mapping resource contours.
Drilling results will ultimately inform a JORC-compliant Mineral Resource model on-site, as well as a mine plan and open pit design ahead of the Q1 2027 production target. Investors will be able to pore over results in the form of a disclosure around October of 2026.
Drill run to reflect watershed moment
“The commencement of this major drilling program is an important next step in the advancement of Watershed following the strong Preliminary Economic Evaluation outcomes announced in June,” TGN Chairman Gary Lyons said earlier this week.
“The RC drilling is concentrated within areas of known high-grade mineralisation targeted for initial mining and is designed to provide greater confidence and definition for resource modelling and mine planning.
“At the same time, the diamond program will provide the metallurgical samples and geotechnical information required to refine process design, pit design and detailed engineering.”
With that, Watershed – and whether the company can commence tungsten production from within Australia by as early as Q1 next year – now stands as the premier item-to-watch for prospective investors seeking to potentially gain from exposure to the tungsten space.
It’s a high-stakes catalyst, but, as is so often the case among developer-stage explorers on the ASX, reaching those catalysts is part of the calculus behind impressive jumps in share price.
Also worth noting: Tungsten Mining NL has is its eyes on a potential NASDAQ listing down the line, suggesting a long-term view towards collaborating with and providing support to North American ventures within the space. Especially the vastly greater liquidity of Wall Street.
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