China's 80% tungsten grip leaves non-Chinese miners without project finance
No futures market, no hedging instrument — Western lenders keep walking away from tungsten projects while Beijing controls supply.
The tungsten market has no futures contract, no liquid price benchmark, and no mechanism for a Western miner to hedge a decade of offtake risk. That structural absence, more than any single export ban, explains why non-Chinese tungsten projects cannot attract project finance while China controls roughly 80% of global supply.6
Western lenders need a bankable offtake contract. Bankable contracts need price discovery. Price discovery requires a market. As one speaker on Bloomberg's Odd Lots podcast put it, "there is no futures market in this because it's such a" small and opaque commodity — leaving project sponsors with no instrument to anchor lender comfort and no route to financial close.6
Tungsten is not a discretionary input. It hardens steel for drill bits, armor plating and cutting tools, placing it in the same critical minerals category as rare earths that Beijing has already used as diplomatic leverage against Japan and the United States. China has effectively halted exports of several heavy rare earths and gallium to Japan since December, a move japan-nrg.com reported as Beijing treating critical mineral supply chains as diplomatic tools rather than straightforward trade flows.3
The tungsten problem sits inside a much larger concentration. The IEA estimates China dominates refining for 19 of the 20 critical minerals it has analyzed, holding an average market share of around 70%. Last year China held a 59% share of rare earth mining, 91% in refining, and 94% in magnet manufacturing, figures the agency published in June.5
Two decades ago China accounted for around 50% of sintered permanent magnet production used in cars, wind turbines, industrial motors, data centers and defense systems. That share has only grown since, IEA analysts noted, meaning the concentration trajectory is working against Western efforts to diversify.5
Stanford's Matteo Maggiori offers a framework for understanding why the gap is so difficult to close: sanctioning power is non-linear, and the difference between controlling 90% and 99% of a market is not a 9% difference in leverage but a qualitative jump in coercive capacity.2
Washington has moved to state-sponsored intervention to compensate for private capital's reluctance. The Pentagon took a $400 million equity stake in MP Materials, the only U.S. rare earth miner, last July — the first investment of its kind in Pentagon history. In February (2026-02), Orion CMC, a consortium including the American government, agreed to buy a 40% stake in the only Western-controlled copper and cobalt mines in the Democratic Republic of Congo.1,4
The scale of those efforts runs into an uncomfortable data point. The former chair of Gécamines, Congo's main state-owned miner, estimates Chinese entities hold stakes in 90% of Congolese projects, suggesting Western state capital is buying into markets where Chinese positioning is already entrenched across the rest of the sector.1
The G7 addressed the concentration issue at the Evian summit in June (2026-06), creating a strategic alliance on critical minerals aimed at breaking China's control over metals crucial to defense, automotive and clean energy industries.5
The alliance has not resolved the financing bottleneck for tungsten specifically. China controls roughly 60% of the world's mined rare earth output and near-total processing capacity, BMI data show, and the Center for Strategic and International Studies noted China held 99% of global heavy rare earth processing capacity as recently as 2023, with the only non-Chinese refinery a small facility in Vietnam.4
The Trump-Xi summit in Beijing on May 14-15 (2026-05-14 to 2026-05-15) produced no formal agreement on export controls. BMI data show exports of yttrium, dysprosium and terbium running at just 42%, 41% and 49% respectively of volumes recorded in the twelve months before China's restrictions took effect, oilprice.com reported on May 26 (2026-05-26).4
For a tungsten project specifically, no G7 communiqué changes the underlying arithmetic: without a price benchmark to anchor offtake contracts, lenders have no basis for a credit decision. Whether the Evian critical minerals alliance produces actual project finance guarantees backed by participating governments, or remains a political statement without binding capital commitments, is the concrete question now facing Western miners trying to reach financial close.5