Almonty makes significant progress with Sangdong Project in South Korea

News Analysis




Almonty makes significant progress with Sangdong Project in South Korea

One of the world’s largest tungsten mine projects, Sangdong, is set to commence operations before the end of 2024 according to owners Almonty.

In a recent interview with The Korea Herald, Almonty CEO, Lewis Black, provided updates on the Sangdong Tungsten Project in Gangwon Province, South Korea. He shared that the mine is set to commence production before the year concludes, marking the final stages of the construction phase. Black also outlined key supply dynamics, noting that the tungsten produced at Sangdong would be divided into two phases. The first phase involves shipping 45% of the design output to the USA, while the second phase channels the remaining design output to local downstream companies. Separately, Black mentioned Almonty's intention to construct a tungsten oxide refinery capable of producing around 4,000tpy of tungsten, approximately 50% of Korea's imports from China.

The Sangdong Mine was one of the world’s largest producers of tungsten from the 1960s until its closure in the early 1990s. In 2015, Almonty acquired the mine and has been actively involved in its redevelopment ever since. The restoration initiatives by Almonty received financial support from the German bank KfW-IPEX Bank, leading to a loan agreement for US$75.1M in 2020. To date, Almonty has received an investment of US$53.9M from this arrangement.

A feasibility study for the project was published by Almonty which highlighted some key details regarding the project. The project boasts reserves of 7.9Mt with a grade of 0.47% WO3, totalling 37kt of contained WO3. Resources in the measured and indicated category amount to 8.3Mt with a grade of 0.49% WO3, resulting in 40kt of contained WO3. The inferred category comprises 52.8Mt grading at 0.44%, equating to 230kt of WO3-contained. The feasibility plan outlines an average annual production target of 5.5kt of WO3 concentrate at 65% WO3 (3.6kt of W-in-concentrate).

Project Blue estimates a modest 1.4% growth in tungsten demand over the next decade, primarily driven by its use in cemented carbides. Another notable application is ammunition making tungsten a highly strategic metal. As more than 90% of primary tungsten supply originates from China, Vietnam, and Russia, there are risks associated with the supply chain. The resumption of operations at the Sangdong mine signifies a significant diversification in the tungsten supply chain, particularly for the USA and Korea. The USA, under the REEShore Act of 2022, prohibits tungsten in its military devices sourced from China by 2026, and the first phase of supply from Sangdong will contribute to meeting this requirement. Korea, which has been heavily dependent on importing about 95% of its tungsten from China, stands to benefit significantly from the Sangdong Mine, enhancing the availability of this critical material for local downstream users.