The race to loosen China’s grip on tungsten is moving to Kazakhstan, where United States-backed mining projects are attempting to compete in an industry where Chinese investment already has an operating foothold.

Global tungsten prices have surged more than 200 per cent since May 2025, according to commodity and energy information provider Argus Media, adding urgency to efforts to develop alternative supplies. The soaring costs followed Beijing’s export controls on selected tungsten products introduced in February 2025 in a market already facing tight mine supply and increased demand from the defence industry.

The supply squeeze has reached US oilfield equipment makers, which are redesigning one of their most important tools as the global shortage raises the cost of making drill bits.

According to Ulterra Drilling Technologies, the cost of manufacturing drill bits had risen by as much as 50 per cent over the past year. The company is responding by shifting production towards steel-bodied models, even as bits containing more tungsten typically last longer when cutting through hard, abrasive rock.

Rival Varel Energy Solutions has made a similar calculation. “Without any stabilisation in tungsten pricing, manufacturers will be forced to transition to steel alternatives,” chief commercial officer Jayme Sperring told Reuters in a report published in May.

China accounted for nearly 80 per cent of mined tungsten globally, producing about 3.7 times the output of the rest of the world combined, according to data from the US Geological Survey. Its dominance extends beyond mining into processing and manufacturing, making it difficult for new producers to compete simply by bringing more of the metal to market.

Prized for its hardness and heat resistance, tungsten is used in industrial tools and some military equipment, including armour-piercing ammunition and missiles, as well as in semiconductors and electronic components supporting AI hardware and data centres.

The US is a major consumer but has recorded no commercial tungsten mine production since 2015. That dependence has made overseas projects increasingly important to Washington’s efforts to secure supplies.

In April, US mining investment firm Cove Capital acquired a 70 per cent stake in two deposits in Kazakhstan’s Karaganda region: Northern Katpar and Upper Kairakty. Their combined estimated development cost is US$1.1 billion, though both remain at the engineering and feasibility study stage, with production targeted for around 2028.

Financing cannot automatically replicate the industrial system China has built over decadesLiu Wenjing, Elistra Advisory That timetable contrasts with Chinese-backed investments in the country. Hong Kong-listed Jiaxin International Resources already operates the Boguty Mine in Kazakhstan’s Almaty region after the facility began trial production in November 2024 and entered commercial operations in April 2025.

Another proposed tungsten investment, involving Kunxin International Investment and Kazakhstan’s SP Saryarka Tungsten, was among more than 60 agreements signed at Hong Kong’s Belt and Road Summit in September, though few details were disclosed.

This difference in development timelines had given China an immediate advantage in the supply chain, according to Liang Yan, Kremer Chair Professor of Economics at Willamette University. Boguty was already producing, she added, while the US-backed projects still needed to complete studies, secure financing and build their facilities.

Liang argued Kazakhstan could become a “vital producer of tungsten”, citing the Central Asian nation’s more than 2 million tonnes of forecast resources and saying it could eventually supply about 15 per cent of annual global mine output.

“I don’t think US financing can neutralise China’s lead in processing capacity and commercial scale,” said Liang, who is also a non-resident senior fellow at Boston University’s Global Development Policy Centre.

The challenge goes beyond bringing new mines into production. Kazakhstan, Liang suggested, would also need to develop more local refining capacity if it wanted to build a supply chain less dependent on China. Without such capacity, new mines might still have to send concentrate to Chinese processors if alternative facilities faced delays or cost overruns, Liang said.

Liu Wenjing, a member of the Astana International Financial Centre’s Executive Council for the Mining Sector and founder and principal adviser of Elistra Advisory, acknowledged that US financing could significantly lower the barriers to building an alternative tungsten supply chain.

But, she cautioned, “financing cannot automatically replicate the industrial system China has built over decades”.

China’s advantage spanned much of the tungsten supply chain, Liu said. That includes processing mined ore into concentrate and producing ammonium paratungstate, an important intermediate material used to make tungsten products, and making finished products such as cemented carbides.

Geography also matters. Kazakhstan borders China while shipments bound for Europe and North America face longer routes, including across the Caspian Sea. “The US has effectively recognised that investing in overseas mines alone will not solve the problem,” said Liu, who previously served as board secretary of Jiaxin.

That strategy is reflected in Washington’s investments in processing capacity at home, including plans to convert tungsten into APT. In mid-September, Washington announced a US$450 million investment in Elmet Group through redeemable preferred shares.

“This shows that US strategy is moving beyond securing ore towards filling the gap in midstream processing,” Liu said.

The same logic applies to transport, as Northern Katpar is being designed to reach international markets through the Trans-Caspian route. The plans, according to Liu, suggested Western-backed projects were addressing how the metal would reach buyers, not just where it would be mined.

This push to develop alternative supply routes has only intensified since China introduced export-licensing requirements in February 2025, the same day new US tariffs on Chinese goods took effect.

While Beijing said the controls were intended to safeguard national security and fulfil its non-proliferation obligations, they were widely interpreted as part of the broader trade and technology rivalry between the two superpowers.

At the same time, China has authorised only 15 companies to export tungsten under its state-trading system for 2026 and 2027. Products covered by the 2025 controls remain subject to separate export licences and end-user checks.

Chinese customs data showed that exports of tungsten products by weight fell 25 per cent year on year in the first eight months of 2026. Exports of sodium tungstate plunged 94.9 per cent, while shipments of ammonium paratungstate, an important intermediate material, dropped 89.3 per cent.

Exports of tungsten-related products from China to the US also fell 21 per cent by volume year on year over the same period. Shipments of unwrought tungsten and tungsten carbide stopped altogether, while exports of tungsten bars fell 42 per cent.

Kazakhstan could move from being a small producer today to a strategically important source of additional tungsten supply outside ChinaLiu Wenjing, Elistra Advisory The restrictions, along with tight mine supply and rising demand, have added upwards pressure on prices.

Fastmarkets, a global price-reporting agency specialising in metals and mining, assessed global tungsten concentrate prices at US$2,500–2,800 per metric tonne unit from May 29, up from US$750–850 at the start of 2026 – an increase of about 230 per cent.

The price pressure is reaching manufacturers. MSC Industrial Supply, a major US distributor with nearly US$4 billion in annual sales, told an investor conference in New York last month that tungsten-related input costs had surged by about 500 per cent.

“They have stabilised, but the ripples through the supply chain aren’t over yet,” chief executive Martina McIsaac said during the event, adding that suppliers were continuing to raise prices at different rates depending on their inventories and access.

Higher costs are also prompting Washington to look beyond new mines for additional supply, including recycling. On August 27, it imposed a one-year ban on exports of tungsten scrap to retain material for US processors. According to materials research platform Material Insights, recycled tungsten provided about 25 to 30 per cent of global supply and was particularly important to the US because it lacks domestic mine production.

For Kazakhstan, the main question may be how quickly proposed mining and processing projects can be brought into operation. The country still accounts for less than 3 per cent of global tungsten mine output, though Liu said new projects could significantly increase its“If Jiaxin International’s Boguty mine continues to expand, and Northern Katpar and Upper Kairakty come into production as planned, Kazakhstan could move from being a small producer today to a strategically important source of additional tungsten supply outside China,” she said.

EarthRarest, a strategic metals research and investment platform, made a similar assessment in a report shared with the South China Morning Post. It estimated that Kazakhstan’s 2.8 per cent share of global mine production represented about one-eighth of production outside China.

“An additional reliable source can matter to buyers diversifying their purchases well before it changes China’s overall lead,” EarthRarest said, adding that the US could help finance mines, processing facilities and transport links, particularly alongside purchase commitments. But it cautioned that it remained unclear whether the projects could produce at competitive costs and deliver reliably.

“The reviewed evidence does not establish that finance alone removes a cost or scale disadvantage,” EarthRarest said.

Kazakh tungsten could potentially reach Western buyers without passing through China if the required mining, processing, transport and customer arrangements all proved workable, according to the report. For the proposed large Kazakh projects, however, “a fully independent route remains a project objective rather than an established operating fact”.

Yet Kazakhstan is not merely choosing between Chinese and American investors. Astana is also seeking to move beyond its traditional role as an exporter of raw materials and develop more of the tungsten supply chain at home.

The Kazakh government’s 2023–2027 geological development strategy called for expanded exploration, digitised geological records, improved mining infrastructure and greater investment in research and skills.

A separate government plan covering rare and rare earth metals through 2028 called for modernising existing facilities, introducing more advanced processing technologies and attracting investment from a wider range of international partners.

Kazakhstan is only part of a broader effort by governments to secure tungsten supplies and capture more value from their mineral resources.

In late August, Britain’s National Wealth Fund announced an investment of up to £71 million in Tungsten West to support the proposed restart of the Hemerdon tungsten and tin mine in Devon. The project is targeting full-scale production in the first quarter of 2027.

Resource-producing countries are also tightening their grip on the metal. Vietnam’s Ministry of Industry and Trade has proposed removing tungsten from the list of minerals permitted for export. It has not specified how long the proposed restriction would last and has stressed that it would not amount to a permanent ban.

Zimbabwe went further in September, suspending exports of antimony and tungsten in all forms, including ores and concentrates, until further notice. The government said the measure was intended to encourage mining companies to refine and process more of their minerals domestically, allowing the African nation to retain more value before export.