A critical shortage of a single chemical is threatening to halt the production of advanced memory chips in South Korea, sending shockwaves through the global semiconductor industry. This crisis has propelled shares of Almonty Industries, a tungsten producer positioning itself as the primary Western alternative to Chinese and Russian dominance. The company’s stock surged 15.3 percent in a single session, reflecting the market’s recognition of its pivotal role.
The immediate trigger is a looming supply halt for tungsten hexafluoride from Japanese suppliers. With Asian stockpiles estimated to last only until June, the race is on to secure new sources. The market for this essential material is extraordinarily concentrated, with China, Russia, and North Korea controlling 95% of global supply. After Beijing slashed its own exports late last year, spot prices for tungsten APT skyrocketed by 534% to $2,250 per tonne by mid-March.
Almonty’s strategic response is twofold, targeting both Asia and North America. In South Korea, the company is preparing for the commercial start of its Sangdong mine in the second quarter. Initial production is slated for 2,300 tonnes of tungsten concentrate annually, with plans to double output by 2027. At full capacity, Sangdong is expected to meet 40% of global demand outside of China. The first concrete production data from this site is anticipated in the upcoming quarterly report in May.
Concurrently, Almonty is executing a radical pivot into the United States. The company is relocating its headquarters from Toronto to Dillon, Montana, a move designed to embed itself within the American defense industrial base. This strategic shift is already paying off, with the US government granting tariff exemptions for Almonty’s material. Furthermore, a mandate requiring US defense contractors to source tungsten from non-Chinese suppliers by 2027 provides a guaranteed long-term demand stream. To navigate Washington’s corridors, Almonty is collaborating with consultancy American Defense International and has appointed former US generals to its board.
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Investors have rewarded this aggressive strategy handsomely. Over the past twelve months, the stock has soared 676%, closing recently at CAD 28.42 on its home exchange. This builds on momentum from a successful Nasdaq listing last summer. Institutional interest is intensifying, with the number of invested funds jumping 55% last quarter to 107. Major positions include Van ECK Associates with a $99.0 million stake, Encompass Capital Advisors at $25.6 million, and Next Century Growth Investors holding $16.3 million. Demonstrating confidence, the company’s chairman made a private share purchase worth CAD 2.1 million in early April.
Analysts are taking note. Following the Nasdaq listing, several US investment banks have issued bullish ratings. DA Davidson initiated coverage with a “Buy” rating and a $25.00 price target, while B. Riley Financial also rates it a “Buy” with a $23.00 target. Oppenheimer assigned an “Outperform” rating and a $19.00 target. Not all feedback is positive, however, with Weiss Ratings maintaining a sell recommendation. The company’s market capitalization now stands at approximately $5.6 billion, with a negative P/E ratio reflecting significant development costs.
Financially, Almonty appears well-capitalized for its expansion. A December capital raise bolstered its liquid reserves to CAD 268.4 million. While the company reported an annual loss of $161.9 million, this figure stems from non-cash accounting revaluations and does not impact operational funding.
The next operational milestone will be the planned start of production at the recently acquired Gentung tungsten project in Montana, targeted for 2026. This will establish a local US supply chain. Meanwhile, shareholders will look for further details on the Sangdong mine expansion at the annual meeting on June 8. If Almonty can execute a smooth production start in Korea this summer, it will directly plug the supply gap created by China’s export restrictions, solidifying its position at the intersection of geopolitics and critical minerals.
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