RECOMMENDATION: Almonty Industries (NASDAQ: ALM / TSX: AII) — the largest Western-aligned tungsten producer in the world and the only major one that owns both mining AND processing outside China. Action to take: Consider buying Almonty up to $22.
--- THE IMMEDIATE PROBLEM: A CHIP-GRADE TUNGSTEN CUTOFF ---
Over the last year, China's exports of high-purity tungsten powder to Japan have dwindled to zero, which matters to the entire global AI-chips arena. On July 1, two of Japan's chemical makers — Kanto Denka and Central Glass — will stop producing the tungsten-hexafluoride gas that wires advanced memory and AI chips. They have already warned Samsung, SK Hynix, and TSMC. Japan imports over 90% of its high-purity tungsten from China, and the gas has risen more than 200% this year.
Tungsten has been repriced from a boring industrial metal into a strategic one. The Rotterdam benchmark (the price Western buyers pay for ammonium paratungstate, APT, outside China) sits at roughly $3,000 to $3,140 a metric ton unit as of early June — off slightly from its May peak of $3,140, but still up nearly nine times versus a year ago. The chip supply shock makes additional squeezes more likely.
--- NO NEW WESTERN SUPPLY ARRIVES BEFORE 2030 ---
China sets the size of the tungsten market by decree, and has cut its first-batch mining quota for three consecutive years — the 2025 quota set at 58,000 tons of concentrate, down 4,000 tons from 2024. A new mine takes a decade or more to permit, finance, and build; market consensus is no meaningful new Western supply before 2030.
Washington has been writing checks for a year and a half: tungsten is one of the top ten most critical minerals on its list of sixty. In December 2024 the Pentagon put $15.8M into the Mactung mine in Canada's Yukon. In late August 2025 the Defense Logistics Agency began testing the market for ~1,700 tonnes of tungsten ores and concentrates for the National Defense Stockpile. By November 2025, at the C5+1 Leaders' Summit, the Export-Import Bank and the Development Finance Corporation added up to $1.6B in Letters of Interest for a tungsten project in Kazakhstan. None of that money produces a single tonne before the end of the decade — so the few companies already producing outside China are the only sellers a Western defense or chip buyer can access. The squeeze is so tight that Chinese traders are now bidding up worn tungsten scrap in American yards for recycling.
Demand is rising on three fronts at once. Semiconductors: tungsten wires advanced memory and AI chips, with equipment sales forecast to climb from $145B in 2026 to $156B in 2027. Defense: the U.S. is rebuilding munitions inventories depleted in Iran — Tomahawk, Patriot, and Precision Strike Missile systems all rely on tungsten. Tech/solar: ultrafine tungsten wire for slicing silicon wafers has added thousands of tonnes of new annual demand.
On June 11, 2026, President Trump signed a Defense Production Act memorandum citing limited capacity, fragile supply chains, and long-lead dependencies in the munitions industrial base. That followed an April 21 CSIS analysis concluding it will take three years or more to return to prewar inventory levels for Tomahawks (tungsten heavy alloy in the warhead), Precision Strike Missiles (each disperse thousands of tungsten pellets), and Patriot PAC-3 and THAAD interceptors (tungsten in the kinetic kill part).
--- CHINA CONTROLS MORE THAN 80% OF THE PROCESSING ---
China refines more than 80% of the world's tungsten — the step that turns raw concentrate into ammonium paratungstate, powders, and carbides factories use. Most concentrate mined elsewhere is still shipped to China to be processed. Any producer that can mine tungsten but not process it has not detached from China's grip. The only supply that counts is a single company that mines AND processes its own tungsten outside China.
--- THE SECTION 232 REPORT LANDS JULY 13 ---
On January 14, 2026, President Trump ordered Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer to negotiate critical-mineral trade agreements and report back within 180 days; tungsten is part of that process. If the trade agreements come up short, Washington has room to pursue tariffs, minimum import prices, quotas, or further Section 232 action. Beyond that, a Pentagon DFARS rule takes effect January 1, 2027, barring Chinese material from defense work at every step of mining, refining, and separation. The EU is building its first joint stockpile of the metal.
--- THE COMPANY: ALMONTY INDUSTRIES (ALM) ---
Co-founded in 2011 by Lewis Black and Daniel D'Amato. Operates active mines across two continents, has a U.S. defense offtake locked in at a hard floor price, is joining the Russell 1000 (effective June 29), and holds roughly $260M in cash. Sangdong, its flagship mine, is producing today.
Sangdong (South Korea, Gangwon Province): produced for decades before closing in the early 1990s on low prices; Almonty restarted it, with Phase 1 commissioned March 2026. The processing plant handles ~640,000 tonnes of ore/year, producing ~2,300 tonnes of tungsten concentrate annually. At full Phase 2 (expected 2027) Sangdong doubles to ~4,600 tonnes/year — roughly 40% of the entire non-Chinese global tungsten supply — as plant throughput doubles to 1.2M tonnes of ore/year on the same site.
Panasqueira (Portugal): producing tungsten for over 125 years; owned outright. Active mining across three levels; a 14,000-meter drilling program (~€2.5M) to open a fourth level. Steady, cash-generating.
Gentung Browns Lake (Montana): one of the most advanced undeveloped tungsten deposits in the U.S. — a permitted project on U.S. soil. Valtreixal (Spain) is earlier-stage development.
The defense connection: in May 2025, Almonty signed a binding offtake with Tungsten Parts Wyoming (TPW), a U.S. defense contractor, to supply a minimum of 40 metric tons/month of tungsten oxide for U.S. defense applications (missiles, drones, ordnance) at a hard floor price with no cap. The 2027 DFARS rule bars China/Russia/Iran/North Korea tungsten from the whole chain; Almonty (mines + processes in South Korea and Portugal) fits the requirement exactly.
The team: CEO/co-founder Lewis Black owns ~8M shares (>$130M), an active open-market buyer as recently as early 2025. Co-founder Daniel D'Amato (board director, ~12.6M shares, largest individual holder; ex-Bear Stearns MD). The board added General Gustave F. Perna (Ret., four-star; ran Operation Warp Speed logistics) in March 2025 and Alan Estevez (former Under Secretary of Commerce for Industry and Security 2022-2025, who designed the export-control architecture) in May 2025. New CFO Jorge Beristain, CFA (effective June 1) and Chief Development Officer Guillaume Wiesenbach de Lamaziere, CFA.
--- THE NUMBERS ---
Q1 2026 revenue $25.4M, up 221% Y/Y. Adjusted EBITDA positive at $6.1M; operating cash flow $9.7M. Headline net loss $5.3M, but $8.4M of that was non-cash revaluation charges on derivative/warrant liabilities — underlying operations are already profitable. Cash $259.9M as of March 31 (vs $7.8M end-2024), from a $90M NASDAQ-listing offering (July 2025), a $129M underwritten offering (December), plus a $700M convertible senior notes offering settled June 9 (2.25% coupon, due 2031, conversion ~$27.40, a 32.5% premium). Funded for Sangdong Phase 2.
--- RISKS ---
Execution: Sangdong Phase 1 just commissioned and is still ramping; a Phase 2 delay past 2027 hurts. Dilution: shares up ~49% over the past year, and the $700M converts could add more paper. Tungsten price volatility: APT off its ~$3,140 May peak to ~$3,000 early June. Single-commodity company.
--- DRIVERS AHEAD ---
Section 232 report due July 13. The 2027 DFARS rule — contractors are locking in compliant supply now (the TPW offtake). Sangdong Phase 2 in 2027 doubles output. Russell 1000 inclusion effective June 29 (passive demand).
--- PRICE & VALUATION ---
~$4.6B market cap on ~$100M annualized revenue — priced on what Sangdong will become. The stock ran from single digits in early 2025 to a peak of ~$23.50 in April 2026, and is ~$16.46 as of writing (pulled back ~30% from the high). Action to take: consider buying Almonty (NASDAQ: ALM / TSX: AII) up to $22.