Iran war fuels US tungsten shortage as weapons demand surges

The war with Iran and continuing weapons shipments to Ukraine are placing growing pressure on supplies of tungsten, a critical metal used in missiles, ammunition and industrial manufacturing.

Tungsten prices have risen as American and European defence companies seek supplies to replace stocks consumed in the conflicts, while China, which dominates global production, maintains tight controls on exports.

The shortage differs from disruption to oil, gas, petrochemicals and helium caused by restrictions on shipping through the Strait of Hormuz because reopening the waterway would do little to resolve the underlying tungsten supply problem.

Tungsten is used in armour-piercing ammunition and other military applications because of its density, strength and exceptionally high melting point. It is also widely used in civilian manufacturing, including cutting tools, drilling equipment, electronics and dental instruments.

China accounts for as much as 80 per cent of the world’s tungsten supply. Beijing imposed export controls on tungsten-related materials in February 2025, citing national security concerns.

According to the US Geological Survey, global mine production was about 81,000 tonnes in 2024, with China by far the largest producer and Vietnam a distant second. The United States currently has virtually no domestic mine production.

The combination of restricted Chinese supplies and increased military demand has forced American tungsten refiners to rely on scrap, recycled material and limited supplies of imported ore concentrates.

Pini Althaus, executive chairman of Cove Kaz Capital, which is developing a large tungsten project in Kazakhstan, said: “The tungsten industry is experiencing unprecedented market conditions.

“Soaring prices are because of scarce supply due to the drawdown of global tungsten reserves as a result of the wars in Ukraine and Iran.”

The United States has been attempting to secure alternative supplies as new Pentagon sourcing rules approach.

From 1 January next year, Department of Defense restrictions will limit the use of tungsten metal powders and heavy alloys mined, refined or produced in China.

One potential source is Kazakhstan, where Cove Kaz Capital is developing two open-pit tungsten deposits which the company says could eventually produce 12,000 tonnes a year.

That would represent about 15 per cent of current global annual mine production. The company says the deposits could operate for more than 50 years.

“Our aim presently is to finalise engineering studies and mine and refinery construction plans and break ground in the next eighteen months,” Althaus said. No date has been announced for full-scale production.

The US government has committed up to $1.6 billion through the Export-Import Bank and US International Development Finance Corporation to support the project, including commitments of $900 million last November and $700 million in February.

Cove Kaz has also requested another $400 million from the Department of Defense, according to the Financial Times.

The project has attracted political attention because Donald Trump Jr and Eric Trump invested in Skyline Builders Group in August 2025. Skyline subsequently announced plans to merge with Cove Kaz Capital and expects to trade as Kaz Resources after completion of the transaction in late 2026 or early 2027.

A Trump Organization spokeswoman said the family had no involvement in the merger and had always been passive investors in Skyline, with no management role.

Representative Robert Garcia, the ranking Democrat on the House Oversight Committee, has asked the Pentagon inspector general to investigate several transactions involving members of President Trump’s family with links to national security.

Kazakhstan is not the only country being developed as an alternative source.

Almonty Industries, a Canada-based mining company, completed the first phase of commissioning of its Sangdong tungsten mine in South Korea’s Gangwon Province in March, returning the deposit to production after more than three decades. The company also operates a tungsten-producing mine in Portugal.

Almonty chief executive Lewis Black said last year that the United States had not mined tungsten domestically for about 30 years and argued that developing American production made sense for defence customers.

Demand is expected to remain elevated as the United States and European countries replenish ammunition and weapons stocks depleted by military operations and supplies to Ukraine.

Cove Capital estimates that US requirements could eventually reach 20,000 tonnes annually, excluding demand from the National Defense Stockpile and other government programmes.

The global tungsten shortage also has implications beyond defence because the metal has a wide variety of uses.

Tungsten carbide is used to manufacture drill bits, saws and other industrial cutting equipment. It is also used in dental drills and in the production of circuit boards found in computers, smartphones and vehicles.

Dr Elizabeth Sterner, assistant professor of chemistry at Lebanon Valley College, said: “Tungsten carbide tips dental drills, making them more efficient and causing patients less discomfort.”

Tungsten weights are also increasingly used in fishing as an alternative to lead.

With new mines requiring years of investment, construction and commissioning before reaching full production, the United States is expected to remain dependent on imported, recycled and stockpiled tungsten while Washington attempts to establish supply chains outside China.