TSX-V: WOF
OTCQX: WFEMF
Frankfurt: OZ4
OTCQX: WFEMF
Frankfurt: OZ4
Follow us on:
Projects
On the move in South Korea
About Tungsten
Introduction
Tungsten constitutes only 0.00013% of the Earth's crust. In its metallic form, tungsten is hard, brittle and grey-white in color, and is unusual in that its ductility increases with working. Tungsten is brittle at room temperature and in impure form has a high specific gravity of 6-7.5. Of all metals in pure form, tungsten has the highest melting point at 3,422 °C, the highest tensile strength, and the lowest coefficient of thermal expansion of any pure metal. In carbide form, its wear resistance is about 100 times that of steel.
In nature, tungsten always occurs as an oxide in more than thirty minerals, but scheelite and the wolframite minerals are the only commercially important tungsten minerals. It is considered a scarce commodity with no replacement. In a 2001 survey by the Bristish Geological Survey, tungsten was ranked in the top most scarce group of elements above rare earths.
BSG Risk List
World production and supply of primary tungsten
Primary production accounts for around two-thirds of the global supply of tungsten with secondary production the remainder.
China accounted for 85% of global production of the metal in 2010 with other major producers being Russia, Canada, Bolivia, Austria and Portugal.
It's no wonder that Chinese producers, many of which are state-owned companies, dominate the global supply of tungsten. The Chinese government has attempted to exert control over its domestic tungsten industry in an attempt to raise prices. This control includes closing down illegal mines and introducing a system of production quotas for tungsten producers. In addition, an export licensing system was introduced to control the supply of tungsten products to the world market.
In following the rules of "state trading" of tungsten when China joined WTO, the Chinese government, starting from 2001, adopted a series of reforms by setting up supply qualification, limiting the number of exporters. To meet the rapidly growth of domestic consumption, The Chinese government, from 2005, is reducing the export quota year by year. The annual reduction is 2 to 3 % each year.
There have also been significant changes in the market both inside and outside China since 2005, and 2008 in particular. The tradition of China tungsten completely relying on export has changed. The domestic consumption in China exceeded the export volume since 2008, and this trend is expected to continue. China has stated that the export volume of intermediate products will be reduced while the down-stream products will be increased.
Costs structures in China have also changed. The resource tax has increased significantly in recent years, mining costs have gone up as the mining depth increases and the ore grade decreases, environmental controls are being upgraded and the cost of labor is several times higher than in 2005.
At the International Tungsten Industry Association forum in 2011, a presentation on the state of the Chinese tungsten industry included the following statement:
"Over the past decades year, China has made significant contributions for the growth of world tungsten industry by supplying tremendous amount of cheap raw materials. The actual value of limit strategic resources has not been reflected as it should be. It is sure that the world tungsten still needs Chinese raw material and China will continue to supply, but, China is no longer able to and should not supply the raw material at low price by sacrificing its resources, and violating its environment."
China's recent export restrictions on tungsten products are expected to continue to create a supply shortage in 2012, prompting the US and the European Union to place tungsten on a list of critical strategic metals. Tightening of supplies from China has led to rising prices since 2005 and will continue to do so. The increase in prices has contributed to a renewed interest in opening tungsten mines outside of China.