Understanding the Shifts in the Metals and Mining Space

Talking Trends

Blockchain and digital infrastructure are reshaping the landscape of financial innovation, offering unparalleled opportunities for efficiency and growth. However, these advancements also bring challenges that require careful navigation. Patrick McHenry, Vice Chair of Ondo Finance and former Chairman of the House Financial Services Committee, and Zach Nunn, U.S. Representative for Iowa's 3rd Congressional District, join Nasdaq TradeTalks to discuss the future of digital assets, crypto regulation and policy, as well as the importance of national security in financial innovation.

Chairman McHenry thinks a broader digital asset bill signed into law this summer. "From what I hear from my former colleagues, they are working really intensely hard on the policy,” he says. "I think the president's going to get a bill signed into law before the end of the summer on market structure. That is really fast, quite ambitious, and I am really proud of that the policymakers on a bipartisan basis are trying to make that happen."

Congressman Nunn introduced bipartisan legislation in 2023 — The Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act — to combat China, prevent cyberattacks and protect U.S. intellectual property.

“[The bill highlights that] we need to have a comprehensive government approach to this with our private sector partners, building a blockchain-first model that ensures not only for our financial sector, but data is becoming the new gold rush, as it were," Congressman Nunn explains. "We've got to make sure that we've got this underpinned right here in the United States in order for it not only to be successful for every user, but to make sure that our adversaries aren't building the rails in which this is going to ride on and can steal that, shut it down, or corrupt it at any moment, which becomes a real concern."

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From your perspective, what are the biggest trends shaping the outlook of the metals and mining sector?

China’s export restrictions on strategic metals, particularly tungsten, are the biggest market factor now, and these will have repercussions for years. China, along with Russia and North Korea, controls about 90% of the world's tungsten supply. For practical purposes, the Chinese export controls are a ban on sales to foreign firms, and tungsten exports to U.S. defense contractors are explicitly banned. This would be an acute crisis except that our Sangdong tungsten mine will begin producing within the next several weeks. Sangdong is the largest tungsten mine in the world, but it can’t replace China’s 90% of world supply. Consumers should anticipate high prices and frantic efforts to expand supply for a long while.

In your recent TradeTalks interview, you specifically highlighted the lack of mines for Tungsten outside of North Korea, China and Russia. What shifts do you anticipate in the mining space, especially as tariffs go into effect?    

President Trump has made it clear that he wants more domestic U.S. mining and processing, which is the right move, so we are certain to see a lot of investment flowing into mining and processing. However, everyone needs to realize that standing up a domestic mining industry is going to be a slog. For some metals, tungsten being one, U.S. reserves will never be sufficient to meet domestic demand.

Removing the barriers to permitting mines domestically is important, but the U.S. needs a reliable supply of critical metals now. Other nations are locking up deals for critical metals all over the world. The U.S. needs to get into that arena to buy time to get a domestic mining and processing industry in place.  

You also spoke about the need to find a balance in the supply chain. How are you preparing Almonty as the U.S. navigates this path toward a more balanced supply chain?

Tungsten is the quintessential military metal. The U.S. uses tungsten to produce every caliber of munitions and to produce armor that resists penetration by tungsten rounds. As incredible as it is that for years this production relied on Chinese tungsten, that arrangement is over. Almonty is redomiciling as a U.S. corporation, which will make us eligible for all sorts of assistance from the U.S. government, and we rapidly integrating ourselves in the U.S. defense raw materials supply chain. Quite soon, Almonty will officially be the only producing U.S. tungsten mining company.

Do you have any unique predictions on the outlook of metal production?  

I can predict what won’t happen. This trade war has given China the excuse it wanted to restrict exports of critical metals. China developed its mining sector by exporting raw materials, but China now is a major consumer of tungsten, rare earths and the other strategic metals. Chinese industry can use as much of these metals as it can get. They want the same profit margins turning raw materials into sophisticated manufactured products that we have enjoyed. China will never again export tungsten and other critical metals to whoever wants some, and cheaply, as they did for many years. 

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