Almonty Industries has extended and expanded its tungsten offtake agreement with Global Tungsten & Powders, raising contracted volumes by 40% and expected annual revenue by US$30 million at current prices.
- Offtake term extended from 15 to 21 years
- Contracted tungsten volumes increased 40% to 4.41 million MTU
- Pricing improved by 6.3%, lifting annual revenue to US$490 million
- Agreement covers 90% of Sangdong Mine Phase I production
- Secures long-term conflict-free tungsten supply for US defence
Long-Term Tungsten Supply Secured Amid Historic Price Highs
Almonty Industries (ASX:AII) has significantly upgraded its tungsten offtake agreement with Global Tungsten & Powders LLC (GTP), locking in a US$490 million revenue stream over 21 years at current pricing. The amended deal extends the contract term by six years, boosts contracted volumes by 40% to 4.41 million metric tonne units (MTU), and improves pricing by approximately 6.3%. This translates to an extra US$30 million in expected annual revenue for Almonty, reflecting the soaring value of conflict-free tungsten amid ongoing geopolitical supply constraints.
Expanded Contract Anchors Sangdong Phase I Production
The agreement covers about 90% of Phase I production from Almonty’s flagship Sangdong Mine in South Korea, a historically high-grade tungsten deposit. Deliveries under the amended contract will now extend into the late 2040s, providing rare long-term revenue visibility in a market where supply from China faces export restrictions. While the deal secures a substantial portion of Phase I output, it does not include the planned Phase II expansion, which aims to roughly double Sangdong’s processing capacity, nor production from Almonty’s other assets.
Strategic Partnership with US Defence Supplier
GTP, a key player in the US tungsten powder market and part of Austria’s Plansee Group, benefits from a guaranteed, conflict-free source of tungsten concentrate. This is particularly pertinent given the metal’s critical role in defence and advanced technologies, including armour and munitions. Almonty’s CEO Lewis Black highlighted the strength of the partnership since 2018 and emphasised the value of the improved pricing and volume expansion as Sangdong ramps up to full Phase I capacity.
Implications for Almonty’s Growth and Market Position
The amended contract not only enhances Almonty’s revenue outlook but also reinforces its position as a leading Western supplier of tungsten. This follows recent milestones including the company’s inclusion in the Russell 1000 and 3000 indexes, which underscore its rising market profile amid surging tungsten demand. As Sangdong transitions from commissioning to full production, the expanded offtake agreement provides a solid foundation for financial planning and investor confidence.
Bottom Line?
Almonty’s expanded offtake deal deepens revenue certainty and strengthens its role in securing critical tungsten supply for Western defence markets.
Questions in the middle?
- How will the planned Phase II expansion influence future offtake agreements and revenue?
- What impact will sustained high tungsten prices have on Almonty’s margins and contract renegotiations?
- Can Almonty leverage this long-term contract to attract further institutional investment?