Tungsten prices have soared more than 700% year-to-date in 2026, the United States has moved to curb exports of the metal, and one ASX-listed company — Tungsten Mining NL (ASX:TGN) — states it can produce tungsten in Australia within the next nine months, targeting first production as early as Q1 CY2027.

Wars drive demand for a critical mineral

The US–Israel–Iranian war in the Middle East and the ongoing war in Ukraine are both increasing global demand for a critical mineral vital to national security and defence: tungsten. While not the whole story of its appeal, tungsten has the highest melting point of any metal, making it highly desirable in defence and technology applications — particularly high-performance aircraft and advanced munitions, where extreme temperatures are created and controlled. That utility extends well beyond the battlefield: the largest share of global tungsten consumption flows into cemented carbides — the ultra-hard composites used in cutting and drilling tools — with further demand from specialist steels, alloys and electronics, and few direct substitutes across these high-temperature, high-wear uses.

On top of war demand depleting Western military tungsten stockpiles, these conflicts are also disrupting the normal supply chains that transport the metal around the world.

China's grip on global supply

Those factors compound what had been an existing problem before the war in Iran: China dominates the global tungsten market, having effectively monopolised the production and processing of the metal. This gives the Chinese economy a market advantage that Western governments are seeking to mitigate by ramping up domestic supply capacity. China has long mined roughly 80% of the world's tungsten, and its grip is tighter still over downstream processing — including ammonium paratungstate (APT), the intermediate product whose published prices serve as the industry's benchmark — which is why policy shifts in Beijing ripple through the entire market.

As far as the US government is concerned, China's hold on tungsten stockpiles represents a potential threat to America's military, given tungsten is a crucial asset in the manufacturing of both ammunition and aerospace components. An example of the risk can be seen in the fact that China has effectively stopped exporting tungsten material to Japan as of August 2026.

To be fair, China curbed exports of tungsten as early as February 2025, but it is a similar move from the US in recent weeks that has really caught attention.

US export ban and US$3B critical minerals package

As of early August 2026, the US has moved to ban exports of scrap tungsten to non-US suppliers — effectively keeping that class of tungsten products firmly within the US. The focus on scrap is telling: with no commercial tungsten mining of its own, the US meets demand through imports and recycled material, making scrap one of the few domestic supply streams Washington can directly control. While the White House hasn't said it, the restriction comes at the same time that war demand has dwindled the USA's tungsten stockpiles.

And, in a move similar to that seen in October 2025, the Trump administration has recently unveiled a US$3 billion spending package to secure critical mineral supplies within the US, which coincided with another boost from the US government for an ASX-listed miner, Sunshine Energy Metals. For those able to cast their memories back that far, critical minerals are back on the agenda — and tungsten's formal designation as a critical mineral by the US, the European Union and Australia keeps it squarely within the scope of such programs.

A shortage building since March

The world is currently grappling with a tungsten shortage — a problem that has been growing since March this year. As of early March, tungsten prices had climbed over 130% since January 1, 2026. Heading into mid-August, and depending on which tungsten products are considered, some Chinese products have increased in price by an eye-watering 800%.

Relief is not quick to arrive in tungsten: even advanced projects must clear drilling, feasibility work, financing and construction before a first tonne ships, so attention during supply squeezes gravitates to the handful of developments already near the finish line.

With the US now seeking to access tungsten from non-Chinese sources to make up for a drawdown in supply borne from two major escalating wars, US ally Australia — which counts tungsten among its own designated critical minerals and backs the sector with federal funding programs — has been thrown into the spotlight, and investors are hunting out attractive opportunities tied to the potential partnerships that could be made.

Tungsten Mining NL targets Q1 2027 production

In the hunt for Australian tungsten producers, it is hard to look past Tungsten Mining NL. The company has two potentially globally impactful projects within Australia, of which the foremost is the Watershed project in Queensland (QLD), where production is slated to commence in Q1 2027.

Already up 220% across the last year as tungsten prices soar, TGN reflects an attractively priced development-stage tungsten mining company with a $300 million market cap. But Watershed, set for imminent production, actually reflects the smaller of the company's two projects.

Adding heft to the company's portfolio is the Mt Mulgine project in Western Australia (WA), which is one of the largest known deposits according to Tungsten Mining Chairman Gary Lyons. The company suggests this is a significant value driver the market has not yet fully appreciated.

“Our Mt Mulgine project in Western Australia reigns as one of the largest tungsten deposits in the world with a first production estimate of early 2029,” Lyons told HotCopper. “Together with Watershed, these two projects give us the perfect blend of speed and scale to deliver stakeholder value both in the near-term and across future years as well.”

Major drilling campaign underway at Watershed

It is progress at Watershed, carried out by the Tungsten Mining NL team, that stands forth as the nearest value catalyst for the stock. Drill rigs are currently on-site and spinning. Early in Week 33 of 2026, Tungsten Mining unveiled a major drilling campaign comprising both reverse circulation (RC) and diamond-tipped drill rigs for a total 21,000-metre drill run targeting known high-grade mineralisation. Meanwhile, the diamond drills will probe deeper underground to further assist in mapping resource contours.

Drilling results will ultimately inform a JORC-compliant Mineral Resource model on-site, as well as a mine plan and open pit design ahead of the Q1 2027 production target. Investors will be able to pore over the results in the form of a disclosure around October of 2026.

“The commencement of this major drilling program is an important next step in the advancement of Watershed following the strong Preliminary Economic Evaluation outcomes announced in June,” TGN Chairman Gary Lyons said earlier this week.

“The RC drilling is concentrated within areas of known high-grade mineralisation targeted for initial mining and is designed to provide greater confidence and definition for resource modelling and mine planning.

“At the same time, the diamond program will provide the metallurgical samples and geotechnical information required to refine process design, pit design and detailed engineering.”

Litmus test and Mt Mulgine study ahead

For investors, whether Watershed starts producing in Q1 of next year will be seen as a litmus test for the company's overall ability to deliver on the larger Mt Mulgine production plan, set for the late 2020s. Towards that latter end, a Mt Mulgine Pre-Feasibility Study (PFS) is due for release in Q3 of 2026, meaning investors will soon have that first-look study to pore over.

With that, Watershed — and whether the company can commence tungsten production from within Australia by as early as Q1 next year — now stands as the premier item-to-watch for those seeking exposure to the tungsten space. It is a high-stakes catalyst, but, as is often the case among developer-stage explorers on the ASX, reaching such catalysts is part of the calculus behind impressive jumps in share price.

Also worth noting: Tungsten Mining NL has its eyes on a potential NASDAQ listing down the line, suggesting a long-term view towards collaborating with and providing support to North American ventures within the sector — particularly given the vastly greater liquidity of Wall Street.