Trump team backs effort for US-Kazakhstan tungsten mine deal
President Donald Trump’s administration is involved in talks for a US company to access one of the world’s largest untapped deposits of tungsten, a metal used by the Pentagon to make ammunition, projectiles and other weaponry.
Commerce Secretary Howard Lutnick has facilitated negotiations between Cove Kaz Capital Group LLC and Kazakhstan’s sovereign wealth fund about a bid to develop two of the central Asian country’s largest deposits of the metal, according to people familiar with the matter.
The talks are aligned with the White House’s effort to boost supplies of the mineral as the US weans itself off China’s rare earths and critical minerals — an issue at the heart of the trade dispute between the world’s two largest economies.
The US government is taking an advocacy role through the International Trade Administration and financial support could be made available for the plan through federal entities, including the US International Development Finance Corporation and the Export-Import Bank, the people said. Those agencies are set up to provide funding for private-sector projects, usually outside the US.
Details have yet to be finalized, but proposals under consideration include the US offering loans for the deal, they said. The Trump administration is not currently seeking an equity stake in the venture, a US official said, speaking on condition of anonymity to discuss private conversations.
Cove Kaz Capital has been in talks for months with the Kazakhstan sovereign wealth fund, Samruk-Kazyna, but has faced significant competition with at least one state-backed Chinese firm willing to pay above market price, the people said.
Cove Kaz Capital needs US backing to ensure they can obtain the financing required to complete the deal, some of the people said.
Representatives for the White House, the US Commerce Department and a lobbying firm representing Kazakhstan’s wealth fund didn’t respond to requests for comment. Cove Kaz Capital declined to comment.
While the scope of Lutnick’s involvement isn’t clear, it reveals the Trump administration’s interest in tapping unconventional tools to acquire assets it deems critical to national security. Direct negotiations with another nation’s sovereign wealth fund are typically reserved for private companies, not senior US officials.
The tungsten deal also puts the US in direct competition with China for the site, an extremely rare scenario in which the economic superpowers are in a de facto bidding war to buy a mine in a former Soviet republic.
The Trump administration strengthened ties with Kazakhstan earlier this year when the Commerce Department helped broker a $4.2 billion rail deal, in which Pennsylvania-based locomotive parts maker Wabtec Corp. agreed to sell to Kazakhstan’s national railway.
That announcement followed a September meeting between Kazakh President Kassym-Jomart Tokayev and Lutnick, during which Trump called in. It’s not clear whether the tungsten project was discussed at that meeting.
Tungsten deal
The tungsten deposits are valued in the billions of dollars, according to people familiar with the matter. Kazakhstan’s wealth fund lists the two deposit locations on its website — Upper Kairaktinskoye and North Katpar — which the group has said will “make Kazakhstan one of the main participants of the world tungsten market.”
The fund has been soliciting bids from multiple parties as it views the deposits as the most desirable untapped tungsten resources in the world, the people said.
Talks have involved creating a joint venture between Cove Kaz Capital and the Kazakhstan wealth fund, with the company operating the mine while building out production and processing within the Central Asian nation, according to the people. The tungsten would then be shipped to the US for defense and commercial purposes, the people said. Kazakhstan would share in the profits, but Cove Kaz Capital would become the project’s majority owner.
Earlier this year, Cove Kaz Capital announced a joint venture with JSC Qazgeology, Kazakhstan’s national geological exploration company, for a rare earth project.
The US Geological Survey, widely regarded as the gold standard of mining data, doesn’t report Kazakhstan among the top countries in the world with recoverable deposits of tungsten. But the country estimates it has more than 2 million tons of the mineral in reserve.
Tungsten extraction in Kazakhstan mostly stopped about three decades ago. New mines would produce supply for 30 to 40 years, the people said.
Currently, China accounts for some 80% of global production of tungsten concentrate, according to the US Geological Survey.
The Pentagon’s Defense Logistics Agency, which manages the US stockpile, lists tungsten as one of its materials of interest. The USGS included tungsten on its list of critical minerals, noting that any significant disruption to supply of the metal would have an impact on US gross domestic product.
(By Joe Deaux and Josh Wingrove)
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