Swedish-headquartered cemented carbide tools maker Sandvik Machining Solutions is to sell its 10% stake in Xiamen Golden Egret Special Alloy (GESAC) to majority owner Xiamen Tungsten. The purchase price is RMB 0.49Bn (US$69M), and the divestment is expected to close in Q2-Q3 2020.
In its announcement, Sandvik noted that the original purpose of the JV, formed in 2005, was to secure supplies of tungsten. The Swedish group subsequently purchased integrated tungsten refiner Wolfram Bergbau und Huetten (WBH) of Austria in 2009, a major producer of tungsten metal and carbide powders for cemented carbide tools.
In addition, the group has been particularly active in the secondary tungsten market. In its 2019 annual report, Sandvik noted that almost 50% of the tungsten used in its products came from secondary sources. Most of Sandvik’s tungsten requirements are sourced from its WBH subsidiary.
The sale may signal renewed interest in the tungsten market for ROW refiners and tool makers to reduce their dependence on Chinese raw materials. China has typically accounted for around 80% of primary tungsten supply over the last 20 years. This trend was particularly clear in the mid-2000s with efforts by western smelters to increase their use of recycled tungsten. Supply chain interruptions as a result of the COVID-19 pandemic have also highlighted the potential pitfalls of having raw material supplies heavily reliant on only a handful of countries.
Roskill’s NEW Tungsten: Outlook to 2029, 14th Edition report was published in April 2020 and details trends in tungsten production, consumption, trade and prices, as well as profiling the major industry players. Click here to download the brochure and sample pages for the report, or to access further information.