EQ Resources gains EXIM interest for tungsten project

EQ Resources Limited (ASX: EQR) has received a letter of interest to support the Mt Carbine tungsten expansion project in northeastern Australia from the Export-Import Bank of the United States (EXIM). 

The historic Mt Carbine tungsten mine is located in far northern Queensland – it was discovered at the end of the 19th century and was a major tungsten producer in the 1970s and 80s. The deposit is still relatively unexplored, and according to EQ Resources’ website, there is considerable exploration potential for new tungsten mineralization in the mining leases and surrounding exploration tenements. The tungsten project is about 2,530 km north of Sydney.

“We are pleased to work with U.S. EXIM and our U.S. customer base to strengthen resilience in a critical defence- and energy-related supply chain,” EQR executive chairman Oliver Kleinhempel said in a release. 

“With two operating mines in Australia and Spain, EQR has positioned itself as a reliable and ambitious partner,” Kleinhempel said. “Recent geopolitical events and aggressive trade policies have contributed to a severe shortage of supply in the tungsten market. EQ Resources is positioned well with its Mt Carbine expansion plans to meet the demand of U.S. customers.”

Under EXIM’s new Supply Chain Resiliency Initiative (SCRI), the letter of interest – announced Friday – states that EXIM is considering a 10-year debt facility of up to $34 million for the capital expansion and further development of the mine.  

Doubling capacity

EQ Resources, formerly Speciality Metals International, announced plans to double production capacity at its Mt Carbine operation as soon as funding has been secured. The company also owns Saloro’s Barruecopardo tungsten mine in Spain.  

Long-lead items and key equipment for the planned processing plant expansion have been delivered to site, the company said. The capacity expansion is to provide economies-of-scale and allows the operation to expand the throughput of low-grade ore from the historic low-grade stockpile as supplement feed to the tungsten ore mined from the open pit and potential future underground. 

The 2022 Mt Carbine underground scoping study details a development plan for the long-term exploitation of the Mt Carbine tungsten deposit, noting that only 19% of the in-situ Mt Carbine resource is categorized as reserves and only those were modelled in the current open cut mining schedule.  

Tungsten supply chain

The SCRI seeks to finance overseas mines to develop sources of critical minerals, reducing the United States’ reliance on China for critical minerals, reducing risk of supply chain disruption from China’s export bans, which sent tungsten prices on the European spot market to the highest level in 12 years last month.

Several countries classify tungsten as a critical mineral including the U.S., the European Union and Australia. Tungsten is the material of choice for a key defence application – what the military calls penetrators – high-density, armour-piercing projectiles.