Finance

U.S. researchers visit Korean tungsten mine amid critical minerals race with China

Published

9 months ago

August 28, 2024

Business Finance News

Workers in July 2019 expand a mine in Germany intended to increase supplies of tungsten and fluorspar.

Picture Alliance | Picture Alliance | Getty Images

BEIJING — U.S. government researchers recently visited a South Korean mine to assess progress towards boosting supply of a critical metal called tungsten from areas outside China, the mine operator said Wednesday.

The Sangdong Mine, owned by a subsidiary of Canada-based Almonty Industries, is set to resume operations this year. Tungsten is an extremely hard metal used for making weapons, semiconductors and industrial cutting machines.

With China dominating over 80% of the metal’s supply chain, Almonty claims the mine could potentially produce 50% of the rest of the world’s tungsten supply.

The U.S. has not commercially mined tungsten since 2015, according to the latest annual report from the U.S. Geological Survey, a government agency that analyzes the availability of natural resources.

Four mineral resource scholars visited the Sangdong Mine in a trip led by Sean Xun, assistant chief at the agency’s National Minerals Information Center, the report said.

The U.S. Geological Survey would make a “significant update” on its assessment of the mine in its 2025 report due out in the first three months of next year, it added.

Western governments want China out of critical mineral supply chains, says Canada Nickel CEO

The agency did not immediately respond to a request for comment made outside of U.S. business hours.

The Biden administration has identified critical minerals and announced tariffs on tungsten and others as part of a broader effort to bolster national security.

“Of the 35 mineral commodities deemed critical by the Department of the Interior, the United States was 100 percent reliant on foreign sources for 13 in 2019,” according to the U.S. Geological Survey.

Almonty has said it’s spending at least $125 million to reopen the Sangdong Mine, which closed in the 1990s.

China, in the past year and a half, has started to use its leverage in parts of the global critical mineral supply chain to control exports.

Beijing has so far avoided any restrictions on tungsten. But forthcoming rules to limit exports of a similar metal called antimony have raised expectations that tungsten will soon be subject to more Chinese export restrictions.

“If Donald Trump wins the US presidency and follows through on his threat to dramatically hike tariffs on China, Beijing might respond with new export controls on critical minerals or deploy existing controls more forcefully,” Gabriel Wildau, managing director at consulting firm Teneo, said in a note Tuesday.

“Chinese regulators may also apply controls selectively, denying minerals to specific foreign companies that are viewed as supporting Washington’s technological containment agenda.”

He added that the U.S. Energy Department has already awarded $151 million in grants to encourage domestic mining and processing of critical minerals, and western nations are expected to respond to Beijing’s “calibrated weaponization of critical minerals by accelerating efforts to reduce dependence on China.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

1 day ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

1 day ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”