The first batch of tungsten mining quotas was announced by China’s Ministry of Natural Resources.

China’s Ministry of Natural Resources has announced a first batch tungsten mining quota of 62,000t for primary tungsten mining enterprises. This is the first time since 2021 that the tungsten ore and concentrate mining quota has been reduced. In 2023, the first batch of tungsten quotas was set at 63,000t, the same as it was in 2022 and 2021. The amount set in 2024 will see 1,000t less material enter the market, a decrease of 1.6% year-on-year. China’s full-year 2023 tungsten mining quota was set at 111kt of 65% WO3-in-concentrate which was the same as 2021 and 2022.

Since 2002, China’s Ministry of Natural Resources has issued an annual quota for tungsten mining and distributed it between various tungsten mining enterprises. The quota is to protect national reserves and ensure a sustainable supply of tungsten in China. It should be noted that 2023 was the first time China's Ministry of Natural Resources changed the terms of the quotas. Before 2023, all mining enterprises producing tungsten concentrate had to abide by the quota set out, however, in 2023, there was a reform in the terms which changed to only large-scale primary tungsten producers having to abide by the quota set. Small-scale and tungsten by-product operations have to report their tungsten concentrate production to the provincial Department of Natural Resources instead. This change has been maintained for 2024.

Project Blue believes that tungsten demand recovered to around 102kt in 2023 and we expect a modest 1.4%py growth in tungsten demand over the next decade, primarily driven by its use in cemented carbides. Despite the recovery in demand in 2023, the tungsten market was comfortably supplied - conditions which saw price drops for concentrates and ammonium paratungstate over the first half of the year before the settled towards the end and into 2024. At this point, the significance of the cut in mining output is unknown, however, it does mean less feedstock will be available for intermediate and downstream tungsten producers and can potentially favour prices. However, it is very possible that the Ministry of Natural Resources set a second batch mining quota that will balance the cut in the first half of the year or on the other hand, small-scale and by-product output ramp-up to make up for the cut.