The trade war between the US and China reached a new level last week. On “Liberation Day”, US President Trump raised punitive tariffs to an incredible 125%, prompting China to respond with export controls on rare earth metals that are essential for the manufacture of electric motors, batteries, and magnets, as well as for the defense industry. Similar restrictions on gallium, germanium, and tungsten have also been in place since the end of last year. At least in the case of tungsten, which is needed for use in armor-piercing ammunition, for example, there are signs of easing tensions with the start of production at the Sangdong mine in South Korea. The operating company’s share price, Almonty Industries (TSX:AII), has partially met expectations in recent months, but analysts believe it still holds significant upside potential.
Export ban and chaos in the supply chain
Tungsten is a critical metal with unique physical properties such as high density, hardness, and heat resistance. In electromobility, tungsten is increasingly being used in innovative battery anodes, for example, in combination with niobium, to significantly increase charging speed. It is also a component of hard metals, which are needed for the manufacture of precision components in electric motors and power electronics. In the defense industry, which requires significantly more of this raw material due to the changing times, tungsten is used in armor-piercing ammunition, ballistic protection systems, and rocket engines.
China dominates the global tungsten market with a share of around 85–93 per cent of worldwide production. This market power enables the world’s second-largest economy to exert considerable influence on global supply through export restrictions. An export ban by China would severely disrupt supply chains in the electric mobility and defense industries. Experts warn that current stocks in Western countries would only last for three to six months, which could lead to production losses and price increases. Given this dependence, investments in alternative sources outside China, such as South Korea or Portugal, are of strategic importance to ensure the long-term security of supply.
Almonty Industries – The white knight of the Western world
Almonty Industries (TSX:AII) has specialized in the acquisition and optimization of tungsten mines for many years. With the oldest and most productive tungsten mine in Europe, the Panasqueira mine in Portugal, and the Los Santos mine in Spain, Almonty Industries has already become the European market leader. However, with the start of production at the Sangdong mine in South Korea, the Canadian company is entering new territory. The mega-project is expected to cover around 30 per cent of tungsten production outside China and Russia. Initial annual production is expected to be 5,000 tons, but this will be gradually expanded. With production expected to start this year, Almonty shares will likely experience further momentum.
In addition to tungsten, the mine has additional growth potential thanks to molybdenum deposits. From 2026, up to 5,600 tons of molybdenum are to be sold to SpaceX supplier SeAH M&S at a minimum price of USD 19 per pound; a purchase agreement was published a few weeks ago.
Speaking of purchase agreements, a 15-year purchase agreement for tungsten concentrate from the Sangdong mine has been in place for some time with one of Almonty Industries’ largest shareholders, the Austrian Plansee Group, which holds 15 per cent of the Company’s shares. This agreement covers approximately 50 per cent of expected production and guarantees a minimum price of USD 235 per metric ton unit (MTU) APT equivalent. Another major shareholder is Deutsche Rohstoff AG with 12.8 per cent. CEO Lewis Black and Almonty Partners LLC hold approximately 19 per cent.
Lyndsay Malchuk interviews Matthias Greiffenberger, an analyst at GBC AG.**
Analysts see further potential
As Matthias Greiffenberger, an analyst at GBC AG, explained in an interview with Lyndsay Malchuk from Stockhouse, Almonty Industries still has enormous price potential. The current market capitalization of CAD 741.30 million is only around 2.9 times the planned revenues for 2027, which is significantly too low compared to similar projects in the peer group, such as the Mountain Pass Mine, a rare earth project in California. As a result, the 12-month price target for the “game changer in the tungsten market” was raised to CAD 4.20, with a “Buy” rating. Almonty shares are currently trading at CAD 2.64.
Peter Thilo Hasler, chief analyst at Sphene Capital, echoed this sentiment. The Munich-based company raised its price target from CAD 3.21 to CAD 5.20 due to the forecast adjustments. Revenues of over CAD 192 million and EBIT of CAD 69.4 million are expected to be recorded in the books as early as next year. According to Sphene Capital, this, in turn, means a net profit of CAD 46.8 million or CAD 0.19 per share.
Trump fuels the market
The Trump administration’s sometimes chaotic tariff policy could further escalate the trade war. Even an export ban on critical metals by China is more likely than ever. This, in turn, would lead to supply chain disruptions and exorbitant price increases for raw materials such as tungsten. With the start of production at its tungsten mine in South Korea, Almonty Industries has game-changer potential. According to analysts from GBC AG and Sphene Capital, the current market capitalization hardly reflects this potential.
Conflict of interest
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