How Austria can loosen China’s grip over a key critical mineral
Nestled between a turquoise-colored lake and the soaring peaks of the Austrian Alps, Plansee Group is building one of the West’s most formidable critical minerals operations outside China.
The closely held company, based in the town of Reutte, sells tungsten, a metal that attracts far less attention than rare earths but is no less vital to modern industry. The material’s exceptional hardness makes it ideal for tools that cut and shape car parts. Its resistance to heat is crucial to semiconductor manufacturing. And its extraordinary density, nearly twice that of lead, gives armor-piercing ammunition much of its penetrating power.
Few metals can match that versatility, but sourcing it comes with a familiar vulnerability: Beijing dominates the supply chain. A series of moves by China over the past two years — restricting exports, drawing in more raw material and, most recently, cutting off key shipments to Japan — has intensified a global scramble for tungsten. In turn, its cost has soared.
That marks a stark turnaround after years of low prices forced many Western tungsten suppliers out of business. A similar shift is playing out across several critical minerals markets, as Chinese export controls and surging prices put a spotlight on the handful of alternative producers capable of quickly boosting supply.
Plansee is one of them. The company has built up its position in tungsten over decades, securing ore from a mine in South Korea and expanding US processing alongside its European operations. Today, it’s by far the largest manufacturer outside China, accounting for about 12% of global demand and supplying some of the world’s most valuable companies, including ASML Holding NV and SpaceX.
Increasingly, the company’s advantage is that much of its tungsten requires no new mining at all. More than 90% of the 15,000 metric tons it can produce each year comes from worn drill bits, milling inserts and other scrap, thanks to two decades spent developing ways to recycle used material into tungsten comparable in quality to that made from ore.
“Our starting point was China independence,” Chairman Karlheinz Wex said from the company’s headquarters, located a two-hour drive south of Munich. “The basis for becoming independent was recycling.”
That strategy gives Plansee greater control over its materials — and more leverage as competition for supply intensifies. China still accounts for more than 80% of mined tungsten, while its own supplies are tightening as mines age and domestic demand grows. After the country became a net importer last year, Chinese buyers began aggressively snapping up US scrap, in some cases outbidding domestic traders, according to Wex.
China also curbed exports of intermediate tungsten products. Wex estimates that about 20,000 tons of material that flowed annually to Western markets a decade ago has since disappeared.
Amid supply concerns, the Trump administration effectively halted US tungsten scrap exports in August, requiring sellers to offer all of it to domestic buyers.
Tungsten is a niche market on paper, valued at only around $16 billion globally — about 5% of copper’s. But its reach is far greater. Carbide tools made with the metal are used throughout modern manufacturing, from aircraft and automobiles to computers and phones.
“The world would stand still without these carbide tools,” said Simon Jost, managing director of Plansee’s Ceratizit unit in Reutte.
Inside the highly-automated factory, robots navigate between hundreds of workers. They’re ferrying tungsten plates and rods to be stamped, pressed and polished. Some are as thin as a human hair and used by hospitals to perform surgeries. Others look like menacing claws and can bore tunnels through mountains. Nearly every manufactured product requires something to be drilled, cut or shaped along the way, Jost said.
Tungsten is hardly an isolated case of China’s dominance in critical minerals. The country is the leading refiner of the vast majority of strategic metals, according to the International Energy Agency. The IEA estimates that China’s rare earth export curbs alone could put $6.5 trillion in annual downstream production at risk. Ursula von der Leyen, President of the European Commission, warned this week about “dangerous dependencies” on Beijing for critical minerals.
Austria central bank Governor Martin Kocher said policymakers are paying closer attention to how shortages of critical materials can constrain production and fuel inflation. Central bankers have long factored oil and gas into their models. Now they’re looking at less visible inputs such as tungsten, where a shortage of a relatively cheap material can hold up production worth many times more.
Plansee has treated the squeeze as an opportunity to gain market share and advertise its services. The company’s global network makes it one of the few able to turn scrap and ore into usable tungsten without relying on China. Material collected in Europe can be processed in Austria, Finland or Pennsylvania before moving to factories and customers.
Recycling leaves Plansee less exposed to volatile mining markets and swings in Chinese exports. The company is a rarity in Europe.
“We are not particularly good at recycling in Europe right now,” said Román Arjona, chief economist at the European Commission’s internal-market and industry directorate. Too much critical material is still lost because Europe lacks the investment, skills and infrastructure to recover it, he said.
Recycling also cuts Plansee’s environmental footprint. Products made from recycled tungsten generate four to five times fewer carbon emissions than those made from newly mined material, Wex said. Renewable sources provide 98% of Plansee’s electricity, helping the group cut its carbon footprint by almost a third over the past five years.
Revenue rose 4% to €2.35 billion in fiscal 2026, and Plansee has invested €145 million in new capacity to process concentrate, make powder and produce higher-value tungsten products.
Plansee’s location explains some of its success. Jewish chemist and entrepreneur Paul Schwarzkopf founded the company in the Alpine town of Reutte in 1921, lured from Berlin by cheap hydropower from nearby Lake Plansee.
Schwarzkopf fled to the US as Nazi persecution intensified, and his factory was expropriated and converted into an armaments plant. He returned after World War II and eventually recovered ownership following a prolonged restitution struggle. A century later, the same access to low-carbon power remains a competitive strength.
Plansee’s ability to produce tungsten outside China is becoming more valuable for the US, in particular. This year, the company formed a joint venture with Manhattan Five Partners — a US property developer that works with the federal government — to build a strategic reserve of tungsten oxide. Plansee plans to expand its Pennsylvania plant to process about 12,000 tons annually, using recycled scrap and ore from approved sources.
The push is becoming more urgent ahead of January 2027, when new Pentagon restrictions will further limit the use of tungsten originating in China, Russia, Iran or North Korea. Defense suppliers will increasingly need to trace the metal back to where it was mined or recycled and processed — playing to Plansee’s decades of investment in tracking material across borders.
Plansee is also locking in new supplies. It recently extended a deal to buy tungsten concentrate for another 21 years from Almonty Industries Inc.’s Sangdong mine in South Korea. Plansee owns about 10% of Almonty, its largest shareholder, which is also restarting the long-shuttered Los Santos mine in Spain.
Sangdong is instructive of how tough it is to compete with China. The mine closed about three decades ago after cheap Chinese tungsten drove down prices. Now being revived, it could eventually supply as much as 20% of the tungsten concentrate produced outside China, according to Plansee.
This time, the deal includes protections designed to keep Sangdong viable if prices fall again.
“You must think long term,” Wex said.
The European Union is trying to build resilience more broadly. Its Critical Raw Materials Act calls for the bloc by 2030 to extract 10%, process 40% and recycle 25% of the strategic materials it consumes, while reducing dependence on any single foreign country.
Tungsten illustrates the challenge. Europe has mines, processors such as Plansee and a vast stock of the metal already embedded in tools and machinery. Almonty has been working to start up a major potential project in Spain since 2013, but the future of the operation has been thrown into doubt after a regional government issued a non-binding negative environmental assessment against it in July.
Ultimately, recycling more tungsten is key to reducing reliance on China — but only if the scrap remains in Europe long enough to be recovered.
“We need to make sure that all the used tools stay in the Western world,” Jost said.
(By Jonathan Tirone)
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