The Geopolitical Lever: When Commodities Become a Security Issue
The world is currently experiencing a quiet but fundamental shift: commodities are no longer just trade goods, but strategic weapons. Tungsten is one of the few metals indispensable for modern defense, semiconductors, and high-performance materials. This is precisely where a structural gap is emerging, as China continues to control around 80% of global production and has tightened export restrictions. In this situation, every non-Chinese producer is gaining dramatic importance. Countries are beginning to prioritize supply security over short-term costs. This is the moment when a commodities company transforms from a cyclical stock into a geopolitical infrastructure asset.
The Supply Gap: A Market Without Substitutes
The tungsten market is not in a normal cycle but in a structural deficit. Analysts expect a significant supply shortage amid growing demand from the defense, electric mobility, and semiconductor industries. Many existing mines are geologically depleted or were closed during periods of low prices. At the same time, demand for high-performance materials is rising rapidly. This supply bottleneck cannot be resolved in the short term because new mines require years or even decades to reach production. Consequently, prices do not behave as they do in classic commodity cycles – they rise faster and remain high for longer.
The Production Leap: From Niche Player to Strategic Supplier
With the commissioning of the Sangdong mine, a completely new phase began for Almonty. The facility was designed to allow for massive expansion of production in several stages. The first phase recently went into operation, bringing the mine back online after decades. The second expansion stage is expected to nearly double production capacity; this growth is not linear but exponential. This is precisely why analysts speak of a “production leap” that could multiply the company’s size within a few years.
The Margin Engine: A Business Model for Every Price Level
A key competitive advantage lies in the cost structure. Production would remain profitable even at very low tungsten prices, while rising prices lead to disproportionately high margins. Analysts expect production costs to be among the lowest globally by 2028. This means the company is not only a beneficiary of high prices but also a survivor in weak market phases. This combination is rare in the commodities sector.
The Strategic Future: Building a Western Supply Chain
What is truly special is not current production, but the long-term role in the global commodities system. Governments and industries are specifically seeking suppliers outside of geopolitically risky regions. Tungsten is a key raw material for defense systems, missiles, and high-performance alloys. With new projects and processing facilities, a fully integrated value chain is emerging – from ore to high-tech materials. This integration enhances supply security and creates long-term price stability. As a result, the perception of the company is shifting: from a mining company to a strategic industrial partner.
In the video below, IIF host Lyndsay Malchuk speaks with Christopher Ecclestone of Hallgarten & Company about the strategic importance of the Strait of Hormuz, the Middle East conflict, and their implications for global supply chains and raw materials markets.
The Analyst’s View: Clear Upward Strategy Implemented
Experts from leading research firms are largely in agreement. For example, 12-month price targets at Bank of America are set at CAD 27.50, GBC at CAD 28.60, and Cantor Fitzgerald has even found enough reasons to believe the price could reach CAD 36.00. The current annual high of CAD 30.58 was reached in mid-March, meaning some of the mentioned targets have already been met. But what happens if the tungsten price continues to rise after quintupling and the Strait of Hormuz remains impassable for months? A nightmare scenario for the world, but Easter and Christmas rolled into one for Almonty shareholders. Currently, there is a minor consolidation that has brought the price back down to CAD 22.50. A new opportunity is opening up.
Conclusion: A brief pause is no big deal
Investors should exercise some patience at this stage, as Almonty Industries’ rally has been rapid and now requires time to consolidate. The current correction is largely attributable to broader market sentiment; after all, the closely watched CNN Business Fear & Greed Index fell to 15 (on a scale of 0 to 100) on Friday, signaling “Extreme Fear.” The markets are therefore likely to undergo a shift in the near term. Once sentiment stabilizes, top pick Almonty could resume its upward trajectory with renewed momentum. Expect the experts to have to raise their price targets again soon! Time is of the essence!
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