The operational status of specific tungsten mines has historically correlated with the onset of major global conflicts. Mines open just before wars (WWI, WWII, Korea) and close when peace returns, as investors place real capital bets on impending military demand.
The tech-driven 1990s Gulf War made tungsten seem obsolete. However, the prolonged, attritional nature of the war in Ukraine has forced a strategic rethink, highlighting the renewed need for basic, physically effective munitions where tungsten is a key component.
Unlike copper or oil, tungsten has no public futures market for hedging price risk. This inability to forecast or lock in future revenue makes projects unattractive to traditional banks, forcing miners to rely on unconventional equity financing from a small group of specialized investors.
For a trivial investment of just $77 million, a single Tasmanian mine can supply 2.5% of the global market. While this sounds small, it represents a significant portion—about one-sixth—of the market not controlled by China, Russia, or North Korea, highlighting the outsized impact of small-scale investments.
Since private capital won't fund mines that can be undercut by state-backed competitors like China, a government-guaranteed floor price is necessary. This de-risks investment in strategically vital but commercially unviable resources, effectively subsidizing national security through industrial policy.
While state control is a factor, China's 80% market share in tungsten is fundamentally due to possessing the world's highest-grade and most abundant geological deposits. This natural advantage makes it economically difficult for mines in other countries to compete during peacetime.
Beyond military use, 80% of tungsten is for industrial tooling. A shortage, as seen in Nazi Germany late in WWII, directly degrades a nation's entire manufacturing base. Allied soldiers noted captured German tanks were terribly made because they lacked tungsten carbide for tooling.