With global military spending rising at the highest rate since The Cold War, propelled by China’s predatory economic practices and major ongoing conflicts in Ukraine and the Middle East, Western nations’ need to protect their borders, technology and critical minerals is at a generational high. As such, it is open season for investors to identify emerging commodity tailwinds and companies with a differentiated ability to capitalize on them, bolstering allied supply and security.
This article is disseminated in partnership with Allied Critical Metals Inc. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Why tungsten is a military metal
As we established in parts one and two of this three-part series, when it comes to tailwinds, investors keen on increasing their exposure to the pillars of national security needn’t look farther than tungsten.
The critical metal, stronger than any other on Earth, makes it an essential component of armor, ammunition, missiles, aircraft and military-grade electronics shielding, as well as batteries, semiconductors and mining and construction equipment, representing a market Maximize Market Research estimates to grow by US$4 billion from 2025 to 2030.
Governments around the world are well aware of what’s at stake, with the United States, Canada and the European Union all recognizing tungsten as a strategic material, beckoning investors to analyze the metal’s market dynamics for the highest-probability avenues for value creation.
Global tungsten supply vulnerabilities
At present, the tungsten market’s most notable imbalance is China’s dominance, controlling more than 80 per cent of output from mining to processing, with export restrictions currently in place, including 11 other critical minerals, creating a major point of tension for other top economies uninterested in letting the communist nation’s military gain the upper hand.
China’s chokehold on tungsten exports is being exacerbated by the U.S.’s revisitation of its tariff policies, increasing export prices for all of its trade partners and setting the stage for inflation’s return, following a steep decline in Canada from 8.1 per cent in June 2022 to 1.9 per cent in June 2025.
Even though critical minerals, including tungsten, are exempt from U.S. tariffs, China’s refusal to play by free-market rules takes its supply off the table, meaning that the U.S. and its allies are actively positioning themselves to protect citizens by expediting the development of an ex-China supply chain.
The Western response
We find evidence of this positioning in the U.S. Defense Production Act, which allows the president to control domestic resources during national security emergencies, with President Trump citing it in June in a bid to streamline domestic critical minerals production.
The mention follows an executive order to bolster critical mineral production in March, leading the U.S. administration to propose US$1 billion in funding to speed-up supply chain development and Congress to align itself with strategic suppliers, including Almonty Industries, which is expected to become the largest tungsten producer outside of China. Looking farther out, the U.S. Department of Defense plans to ban Chinese tungsten purchases for military purposes in 2027.
Across the pond, the E.U. is building capacity through its Critical Raw Materials Act, instituted in 2024 to support the sourcing, processing and recycling of commodities essential to the bloc’s sustainable growth. A partnership between Canada and Germany announced on August 26 focused on tungsten, lithium, copper, gallium, germanium, nickel and rare earth elements highlights a recent success under the legislation.
From a more global perspective, NATO’s 2025 Summit at The Hague saw allied leaders commit to increasing defense spending from 2 to 5 per cent of gross domestic product by 2035, with critical minerals development set to make up a substantial portion of the difference for nations with leading resources, including Canada, as detailed by Prime Minister Mark Carney back in June.
With the Western world focused on minimizing reliance on Chinese critical minerals, and tungsten representing a pressing unmet need, it stands to reason that operators tailormade to boost conflict-free supply will be first in line to benefit from this confluence of events.
Allied Critical Metals’ role in the defense ecosystem
A newly listed tungsten miner that demands investor attention is Allied Critical Metals (CSE:ACM), market capitalization C$44.27 million, which is on track for efficient, near-term production in NATO member Portugal and has a letter of intent in place with Global Tungsten & Powders, a U.S. tungsten powder manufacturer, that has led to numerous ongoing discussions with refineries across the world.
Allied Critical expects to break ground on a pilot plant at its past-producing Vila Verde project in Q4 2025, with an initial production goal of 250 tonnes of WO3 per year and the potential to double this output contingent on market conditions. Shanghai Metals Market is pricing a tonne of WO3 at just over US$49,800 on August 30, meaning that pilot plant revenue could approach US$25 million at full capacity.
In terms of mineralization, Vila Verde boasts two drill-tested tungsten-tin zones spanning 2.1 km x 1 km and 1 km x 0.5 km, respectively, which, when combined with available tailings and alluvial material, are expected to result in plant feedstock averaging 0.21 per cent WO3, yielding high-purity concentrate for testing by midstream and downstream players.
With non-dilutive pilot plant funding in the works and initial cash flow on the horizon, leadership is keen on making tungsten production a long-term return driver, recently breaking ground on a fully funded drilling program on its past-producing Borralha project, 45 km to the northwest of Vila Verde, guided by 3,680 metres of high-grade intercepts in 2023 and 2024 – including 114 metres of 0.23 per cent WO3 – with numerous prospective targets around the original mine still to be explored.
As per the June 2 news release, Roy Bonnell, Allied Critical’s chief executive officer, expects the program to grow Borralha’s already considerable indicated and inferred resources, currently standing at about US$600 million in tungsten, copper and silver in the ground, while ongoing metallurgical testing vies to improve metal recovery and concentrate grades, setting the stage for an enhanced valuation in a new preliminary economic assessment expected in 2025.
Further supported by Vila Verde’s exploration upside, given that it’s three times Borralha’s size, Allied Critical has wasted no time positioning itself as a partner to Western nations, establishing a U.S. subsidiary in July and staffing it with government experts – including a former U.S. Secretary of Homeland Security and a former Commanding General of the U.S. Army Intelligence Center – who will help the company build relationships across the NATO member’s most critical industries and aid in its quest to bolster domestic supply and lessen China’s critical metals leverage.
Allied Critical’s alignment with Western tungsten procurement policies and growing awareness in the marketplace, as highlighted by a recently closed C$5.1 million financing, has resulted in a 72.5 per cent stock return since listing in April 2025, suggesting investor optimism about the company’s ability to deliver high-quality tungsten and capitalize on the military metal’s demand tailwind.
Judging by the pedigree of Allied Critical’s leadership team, which is brimming with global technical and C-suite experience spanning tungsten, gold, silver, copper, zinc and phosphate – including a president with decades in Portuguese exploration and project assessment – conviction is undoubtedly warranted.
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