Following the parabolic rise in critical raw material stocks in recent weeks, sharp corrections set in at the end of last week. The trigger was that US Treasury Secretary Bessent proposed a trade “ceasefire” with the world’s second-largest economy, China. However, producers of rare earths and tungsten will likely continue to experience long-term gains due to persistent scarcity. As a result, the recent consolidation offers attractive entry opportunities, particularly among Western suppliers.
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MP Materials – US government triggers sell-off
A renewed trade war between the US and China caused nervousness on the commodity markets. At the end of last week, US Treasury Secretary Scott Bessent proposed extending the current truce in the trade dispute beyond the initially agreed period of three months, but only if Beijing renounces its planned export restrictions on rare earths.
The current deal, which suspends some of the additional tariffs on Chinese goods, expires in November. According to Bessent, an extension is “possible,” but the decision must be made in the coming weeks. This suggests that both sides are trying to buy time while tensions continue to escalate in the run-up to the APEC summit in South Korea.
Economists viewed Bessent’s move as part of a strategic gambit to put pressure on China. The aim is to form an international front against Beijing’s raw materials policy and protect global supply chains.
The announcement triggered strong reactions on the stock market. US rare earth stocks such as MP Materials plummeted significantly. The share lost nearly 20 per cent of its value within three trading days and is currently in a significant support zone at around US$80.
Globex Mining – Diversified portfolio takes off
The broadly diversified portfolio of Globex Mining (TSX:GMX), managed by CEO Jack Stoch for decades, is currently benefiting from the hype surrounding several commodity classes. In addition to gold, which has exploded to a new historic high, and silver, which has broken through the US$50 per ounce mark, industrial metals such as rare earths and lithium are also booming.
The market capitalization of the so-called “mineral bank” currently stands at C$108.82 million, after Globex shares have gained over 62 per cent since August to reach an interim high of C$2.05. However, the intrinsic value of the currently 262 projects, which are primarily located in legally secure Canada, is likely to be significantly higher. The Company manages 133 precious metal projects, 69 properties containing base metals such as copper, zinc, and nickel, and 60 projects containing specialty metals such as rare earths, lithium, antimony, and uranium. Globex generates ongoing cash flow from 108 partners through licensing agreements and royalty payments.
In addition to its broad portfolio, Globex Mining also has cash and marketable securities worth over C$30 million.
In recent weeks, Globex Mining has drawn attention twice with new exploration results. In Nevada, the Company has staked 16 claims covering approximately 134 hectares. Initial samples from the Red Star Project in Clark County yielded impressive values of up to 1,171 g/t silver and 11.5 g/t gold. Geologists identified several quartz vein systems extending over two kilometers in length, showing epithermal mineralization with exceptionally high-grade structures, with gold equivalent values in excess of 20 g/t. Systematic exploration of the area is still in its infancy, but 65 recent samples and new mapping efforts could mark the start of a renaissance for this historic mining district.
Globex is also reporting progress in Quebec. Partner Radisson Mining has again discovered high-grade gold intersections on the Kewagama Gold Mine Royalty Claims, on which Globex holds a 2 per cent royalty. Drilling extends the mineralization to a depth of up to 300 meters. The exploration target for the O’Brien project is 3-4 million ounces of gold.
Almonty Industries – Undisputed market leader
Even this leading player, not only for the Western defense industry, came under pressure after a breathtaking price rally in recent weeks. The pullback to C$11.51, a loss of over 23 per cent, could offer long-term investors another attractive entry opportunity.
Almonty Industries (TSX:AII) is increasingly becoming a key strategic player in the battle for Western industries’ independence from China. While Beijing controls over 80 per cent of the world’s tungsten supply, Almonty is positioning itself as one of the most important alternatives with the Sangdong mine in South Korea. The project, once one of the largest tungsten deposits in the world, is set to begin production later this year. At full capacity, Sangdong is expected to cover over 80 per cent of Western non-Chinese production.
The Company is on solid financial footing. Following a successful capital increase of over US$90 million and its Nasdaq listing, Almonty has the funds to implement the project as planned.
CEO Lewis Black is also pushing ahead with the expansion of the value chain with the construction of its own oxide refinery, which is expected to further increase margins. In addition, another strategic metal is coming into focus: molybdenum, which is also found on the Sangdong property and plays a central role in the defense and energy industries.
Long-term purchase agreements with minimum prices secure stable revenues and protection against market fluctuations for the Canadians, while rising tungsten prices provide additional tailwinds. With the start of production approaching, geopolitical tailwinds and a clear growth strategy, Almonty Industries is likely to become one of the most important raw material suppliers outside China.
After a breathtaking rally, a statement by the US government triggered a sell-off in commodity stocks, which could represent attractive long-term entry opportunities. Globex Mining benefited several times from the current hype. Almonty Industries is considered the hope of the Western defense industry.
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