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Building America’s Defense Critical Metals Supply
Take-or-pay agreement unlocks European tungsten supply from legacy mine waste, beating traditional mine development timelines amid Western supply chain reshuffle
Almonty Industries Inc. (NASDAQ: ALM), a leading global producer of tungsten concentrate, has signed a long-term supply agreement with Wolfram Bergbau und Hütten AG (WBH), a subsidiary of Sweden’s Sandvik Group, to recover tungsten from tailings at the Los Santos mine in western Spain. Shares of Almonty rose 3.8% in premarket trading Thursday following the announcement.
The pact marks the first commercial tailings-based tungsten supply deal in the Western tungsten industry, representing the core breakthrough of the partnership. Unlike conventional mine development that requires long lead times and heavy capital expenditure, the tailings retreatment model extracts tungsten concentrate from historical waste stockpiles left by prior mining operations, drastically shortening supply lead times and delivering a more responsive supply solution. Almonty has materially improved WO₃ recovery rates from tailings processing through ongoing testing, allowing the Los Santos restart to be built entirely around waste recycling rather than new primary extraction.
Under the multi-year take-or-pay agreement, the parties have committed to a minimum volume of approximately 1,720 tonnes of contained WO₃. WBH will make a one-time upfront payment of US$3.0 million for the offtake rights. The Los Santos mine, an open-pit scheelite skarn operation located roughly 50 kilometers south of Salamanca, Spain, has been on care and maintenance since February 2020. All material supplied under the deal will be sourced from retreatment of the mine’s existing tailings inventory.
The two companies share highly aligned business logic in tungsten recycling. WBH, a vertically integrated tungsten producer under the Sandvik Group since 2009, operates the only integrated tungsten smelting facility outside Asia and Russia at St. Martin im Sulmtal, Austria. Alongside feedstock from its own Mittersill underground scheelite mine, the company has long run secondary tungsten recycling operations. For WBH, the agreement adds a fully traceable, non-Chinese, EU-origin feedstock source to its smelter, which supplies the Western hard-metal and powder metallurgy sectors.
The deal lands right in the policy window of Western critical mineral supply chain restructuring. New U.S. defense procurement rules taking effect January 1, 2027 will extend restrictions on specified tungsten materials from China, Russia, North Korea and Iran back to the mining or production stage of ore and feedstock, boosting the value of tungsten with clear non-Chinese provenance in Western defense supply chains.
China currently accounts for roughly 80% of global tungsten output, while Spain holds the largest tungsten reserves in Western Europe. Western economies are accelerating efforts to develop tungsten resources within their own borders and allied networks to build independent supply chains.
“What this agreement gives us is a take-or-pay commitment from a Sandvik Group company, index-linked pricing with a floor beneath it and a sharing of the financial requirements to reactivate the property,” said Lewis Black, Chairman, President and Chief Executive Officer of Almonty. “That combination is what allows us to bring a European Union asset back into production with a defined route to market from the first shipment.”
Black added that if the tailings recycling model proves successful, the company will replicate the technology at its Panasqueira mine tailings in Portugal and at other abandoned European sites. Mobile tailings processing plants will also significantly cut permit timelines, he noted.
This marks Almonty’s second supply-side program rolled out recently, following its earlier announcement of small-scale miner collections in Rwanda. Additional programs are currently in the works and will be announced shortly, according to the company.
Almonty is a leading global supplier of conflict-free tungsten, a strategic metal critical to defense armor, munitions and advanced electronics manufacturing. Its flagship Sangdong Mine in South Korea, one of the largest and highest-grade tungsten deposits in history, is expected to become a core supplier to the non-Chinese tungsten supply chain at full capacity. The company also has assets in Portugal, the United States and Spain.
