The Tungsten Market Is Warning of an Upcoming War

The episode opens with hosts Joe Weisenthal and Tracy Alloway discussing Joe's lost tungsten cube investment from 2022, a novelty item that symbolizes the boom-bust nature of interest in critical minerals. They then interview David Fickling about tungsten's historical importance and current geopolitical significance.

Fickling explains that tungsten has operated as a "prediction market for war" since the early 20th century. He documents this through the history of the Dolphin Mine in Tasmania, which opened in 1917 during World War I, closed after the war ended, reopened in 1938 before World War II, was sustained by the Korean War, but then largely closed during the Cold War's shift toward technological warfare. It has remained closed since 1990 and is now reopening as geopolitical tensions rise.

Tungsten's unique properties make it militarily valuable: it has an extremely high melting point (over 3,000 degrees Celsius) and exceptional density similar to gold, making it ideal for armor-piercing projectiles and cluster munition shrapnel. During peacetime, 80% of tungsten use is in industrial applications like tungsten carbide drill bits and tooling. The material also has emerging applications in turbine blades for jet engines and data center power systems.

The market structure is deeply problematic for non-Chinese producers. The global tungsten market is only about 85,000 metric tons annually, and there is no futures market or forward price curve, making it impossible for miners to hedge costs or secure bank financing. Prices can fluctuate wildly—from $300 to $3,000 per dry metric ton unit (equivalent to roughly $40,000 to $400,000 per ton)—depending on geopolitical conditions and Chinese export controls. Most Western mines operate above breakeven profitability thresholds.

China dominates production not through strategic maneuvering alone but because it has superior geological resources that have been developed for over a century. The only economic way to produce tungsten outside China is through government price supports or strategic reserves. The Dolphin Mine in Tasmania, if successful, could supply approximately 2.5% of global demand, or roughly one-sixth of the "free world market" (non-Chinese supply), yet required only $77 million in total investment over 20 years—a trivial sum compared to defense spending.

Fickling argues that the 1990s strategic pivot toward technological superiority in warfare (exemplified by the Gulf War) caused Western nations to deprioritize tungsten stockpiles and production. However, the Ukraine conflict has prompted a rethinking, as modern warfare shows characteristics of 20th-century attrition-style battles where tungsten-based munitions are crucial. A potential Taiwan conflict with the world's largest manufacturing power would likely require sustained tungsten supply.

The hosts and Fickling discuss potential policy solutions, including establishing a price floor for critical minerals or creating a strategic reserve similar to the Strategic Petroleum Reserve. However, there is debate about whether such mechanisms become vehicles for industry rent-seeking rather than genuine strategic security. Fickling argues for targeted intervention on a small set of truly critical minerals including tungsten, rare earths, gallium, and germanium, with price security lasting long enough for miners to secure financing.