American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
The West’s critical minerals strategy is trapped in an expensive cognitive error: the assumption that pouring sufficient capital and policy resources into midstream processing can “catch up with” or even “surpass” China. The reality is that this race has effectively ended in multiple key markets.
In a recently published article, economic geologist Nicholas Vafeas introduced a paradigm-challenging analytical framework — the “Critical Dominance Opportunity Index” (CDOI). Rather than asking “who controls processing capacity today,” this index poses a far more forward-looking question: “How much room is actually left for new players to successfully enter a market and build strategic leverage?”
This line of inquiry exposes a massive blind spot in current policy debates. According to 2025 data from the World Economic Forum and the International Energy Agency, China ranks first in refined production for 19 of the 20 tracked critical minerals, with an average global share approaching 70%. Among these, processing of gallium (99%), graphite (96%), manganese (95%), and rare earth elements (91%) has formed a virtually unassailable monopoly.
The key point is that this monopoly was not built overnight. Processing dominance is an ecosystem, built on decades of experience and integrated supply chain logistics. By the time a country controls most of a processing market, it has accumulated thousands of small competitive advantages that are extraordinarily difficult to recreate.
Viewed through the lens of the CDOI, the market is clearly divided into three tiers:
Structurally closed markets: The processing landscapes for gallium, graphite, rare earths, and lithium are already “closed loops.” Even if Europe and the United States can build individual plants, they cannot overturn China’s midstream hub position.
Still contestable markets: The processing landscapes for base metals such as copper (China accounts for 44%) and nickel (Indonesia accounts for 43%) remain relatively open, with no single player achieving overwhelming control. However, this window is open to both East and West — “if not actively engaged, it could equally be monopolized by adversaries.”
Institutional blind-spot markets: Hafnium and boron are currently dominated by OECD nations, appearing “safe,” but this dominance relies entirely on policy coordination among allied countries. Once cracks emerge in that coordination, a backdoor opens.
Tungsten is precisely the most brutal testing ground for this logic.
China’s tungsten processing market (CDOI) has been deemed “effectively closed,” similar to graphite. China controls approximately 79% of global tungsten mining and 80% of downstream processing products. However, what Western nations have yet to fully recognize is that China has already extended its strategic reach to the “next contestable frontier” — secondary supply, i.e., the recycling system for tungsten waste streams.
According to the Financial Times, since early 2025, Chinese traders have been actively bidding for U.S. tungsten scrap, with offers reaching up to five times those of domestic U.S. recyclers, causing U.S. tungsten scrap prices to surge 350% since May 2025. Simultaneously, China is leveraging investments in projects such as the Bakuta tungsten mine in Kazakhstan to ship overseas-mined raw materials back for domestic processing. From early 2025 to early 2026, China’s tungsten concentrate imports surged approximately 180%.
This two-pronged strategy of “importing raw materials, exporting value-added products” clearly reveals China’s intent: once the primary processing market is closed, control every remaining pathway through which future leverage can be created — the entire value chain from extraction to recycling, achieving “closed-loop” control.
This reality is painful for Western policymakers, yet it is a necessary wake-up call. Pouring billions into structurally closed processing markets may buy “resilience” — but this is essentially an expensive subsidy project, not a competitive strategy. As Dr. Vafeas pointed out, strategy has never been about stubbornly trying to win every race, but rather about recognizing which races are still worth running. If the West cannot distinguish between “reducing dependence” and “building dominance,” then no matter how much it invests, it will only be operating within a competitor’s ecosystem, purchasing limited strategic space at high cost.
