Yeongwol Tungsten Mine Restarts After 20 Years… Korea reimagining ‘necessary goods independence strategy’

Toronto – January 06, 2022, – Almonty Industries Inc. (“Almonty” or the “Company”) (TSX: AII / ASX: AII / OTCQX: ALMTF / Frankfurt: ALI.F) is pleased to provide an update of its South Korean operations.

Editor’s note:

This is an era in which the economy determines the survival of a country. As the tendency to weaponize resources becomes evident, the priorities of security are being reversed. China is running rampant. The ‘vitamins of the high-tech industry’ are rare earth metals (such as tungsten). The United States is drawing in its allies to exert pressure on the procurement of key strategic materials. Japan is reviving the practice of raising rice self-sufficiency by promoting ‘food security’. So diagnose Korea’s response strategy…

Almonty Korea Tungsten Corporation (Previously KTC, Dae-Han-Jung-Seok), tungsten producer, declared tungsten production in Sangdong-eup, Yeongwol-gun, Gangwon-do last year, for the first time in about 20 years since the mine closure in 1993.

Korea, which was a global tungsten producer until the 1970s, was pushed down by China’s “aggressive dumping strategy”, therefore becoming an importer of tungsten from 1980s,

However, China’s recent signs of resource weaponization have made a reversal.

Almonty, one of the world-leading large corporation, has invested in Korea’s tungsten production.

Considering the reserves of about 5,800 tons, the company expects that there will be no worries regarding tungsten shortage for about 60 years from next year.

On the 22nd of last month, Minister of Trande, Industry and Energy, Seung-wook Moon signed an “Adblue (urea) supply co-operation agreement) with the Minister of Trade, Industry and Energy of Vietnam.

It was the result of desperate efforts to diversify import sources when the amount of Adblue ran out due to China’s export restrictions.

It is expected that up to 120,000 tonnes of Adblue (urea) per year will be imported from Vietnam for three years and is equivalent to 30% of imports in 2020 (370,000 tonnes)

The Government official have stated that “the shortage of Adblue (Urea) has come to an end”

Completely overhauled Government supply chain response system.

According to the Government and relevant industries on the 5th, the “pan-ministerial Task Force (referred as TF) on key items for economic security” is organized by the Government in November last year is a symbolic change in the field of economic security.

Currently, about 200 items will be managed by the TF, have been selected in consideration of their impact on the domestic economy and external dependence.

The Government plans to discover additional items to be managed by the first quarter of this year.

Items subject to management are intensively managed and periodically adjusted through the Early Warning System (EWS) by grading them into 4 levels (A-B-C-D) per their importance.

Experts point out that such an active response by the government is not only essential in an era of increasingly severe economic security, but also needs to be continuously revised and supplemented.

Seo Yong-gu, a professor of economics at Sookmyung Women’s University, stated that, “It can be seen that globalisation of the United States has come to an end. Considering the domestic economic environment that relies on trade, the time has come for the role of the government to be more important than ever.”

In fact, while strengthening the response system for vulnerable items, the government is preparing various supply and demand strategies such as expansion of stockpiles; diversification of import sources; conversion of domestic production and international cooperation.

For security reasons, the Government is not disclosing resources with weak supply externally, but looking at the data of the Korea International Trade Association, items with high trade dependence can roughly be identified

According to the Korea International Trade Association, a whopping 3,941 (31.3%) of the 12,586 items that Korea imported from January to September last year were 80% or more dependent on specific countries

In particular, 1,850 items imported from China accounted for more than 80% of the total, which was more concentrated than the US (503 items) and Japan (438 items).

Magnesium ingots, where its material prices have soared since last year, are still 100% dependent on Chinese imports.

However, in the case of tungsten oxide, which relies on Chinese products for 94.7%, it is expected that dependence on tungsten oxide can be greatly reduced once domestic production starts, as in the case of Almonty Korea Tungsten Corporation.

Still a long way to go… Must stay vigilant on the gap between the rich and the poor on resources.

If the government’s efforts to stabilise supply and demand results in success, it is expected that a much more stable management system will be established than before.

However, industry and academic circles point out that “there are still holes” and that the government should communicate with the industry from time to time and take a more proactive response.

Even after experiencing Japan’s export restrictions on semiconductor-related products just three years ago, the government’s response, which was neither agile nor detailed, should have not been repeated at the time of the Adblue crisis last year.

In fact, on the 3rd, an official from the oil industry who is located near Incheon’s North Port said, “The government’s response to the Adblue incident was appalling and there were quite a lot of confusion at the site.”

“Without any word from the Government, the announcement from Government was that the supply of Adblue was limited to selected service stations, and countless vehicles that were turned around due to this, and service station selection was randomized which caused significant losses to those who were not selected for distribution”

He said, “Most of all, in the past, if the supply was low, it could be obtained at a high price, but now, there is a widespread belief that if one essential item stops, the entire industry may be in trouble.”

There are also concerns that the phenomenon of “gap between the rich and poor” of essential items will become clearer in the future depending on the size of the company, capital, and information power.

Mr, Kwon(61), a freight forwarder, said, “Even during the Adblue crisis, large transport companies that were able to stockpile large quantities of Adblue passed the year without much worry, but Individual business owners were only able to operate their vehicle by paying more or buying them through direct overseas purchases.” “This gap is only going to grow, and the government should take a closer look at the scene,” he advised.

About Almonty

The principal business of Toronto, Canada-based Almonty Industries Inc. is the mining, processing and shipping of tungsten concentrate from its Los Santos Mine in western Spain and its Panasqueira mine in Portugal as well as the development of its Sangdong tungsten mine in Gangwon Province, South Korea and the development of the Valtreixal tin/tungsten project in north western Spain.

The Los Santos Mine was acquired by Almonty in September 2011 and is located approximately 50 kilometres from Salamanca in western Spain and produces tungsten concentrate. The Panasqueira mine, which has been in production since 1896, is located approximately 260 kilometres northeast of Lisbon, Portugal, was acquired in January 2016 and produces tungsten concentrate.

The Sangdong mine, which was historically one of the largest tungsten mines in the world and one of the few long-life, high-grade tungsten deposits outside of China, was acquired in September 2015 through the acquisition of a 100% interest in Woulfe Mining Corp.

Almonty owns 100% of the Valtreixal tin-tungsten project in north-western Spain.

Further information about Almonty’s activities may be found at www.almonty.com and under Almonty’s profile at www.sedar.com.