Almonty Industries (AII) investor relations material

Market dynamics and pricing

• Tungsten prices have surged 7-9x over the past year, reaching record highs due to supply tightness in China and export controls on key products.

• The removal of Chinese mining subsidies and a shift to free market pricing have led to mine closures and China becoming a net importer.

• Despite recent price drops in China, structural supply issues and rising production costs persist, especially as China imports more concentrate.

• Western supply response is hampered by bureaucracy, permitting delays, and environmental legacy issues, making new projects slow to develop.

• Minimum pricing in contracts is emerging as a tool to stabilize the market, but is not yet widespread in tungsten.

China's strategic position and supply chain evolution

• China remains the dominant supplier, accounting for 75% of global tungsten supply and 55% of consumption, but is shifting focus to downstream value-added products.

• Chinese policy now prioritizes importing concentrate and exporting finished components, reducing raw material exports.

• Human capital for tungsten mining has eroded in the West, making it difficult to rebuild supply chains outside China.

• New Chinese projects are mostly offsetting declining older mines, with increased reliance on imports from Kazakhstan and other countries.

• Export controls on dual-use tungsten products are tightening, making it nearly impossible for Western buyers to secure supply directly.

Demand trends and sectoral shifts

• Defense sector demand for tungsten is rising rapidly, projected to overtake automotive by the mid-2030s, potentially reaching 20% of total demand.

• Automotive demand is slowly declining due to the shift to electric vehicles, though hybrids still require significant tungsten.

• New applications, such as tungsten hexafluoride in semiconductors, are supporting demand growth.

• Western demand is also rising as traditional supply channels from China become less reliable.

• Substitution is limited due to tungsten's unique properties and minimal impact of price on end-product costs.