Strategic Tungsten Partnership Forges New Path for Los Santos Mine
In a significant development for the European critical minerals sector, Almonty Industries, a prominent global tungsten producer, has announced a multi-year, take-or-pay offtake agreement with Wolfram Bergbau und Hütten (WBH), a subsidiary of the industrial giant Sandvik Group. The deal centers on the supply of tungsten concentrate recovered from existing tailings at Almonty’s Los Santos Mine in western Spain. This strategic partnership not only provides a secured route to market for a vital industrial metal but also underscores the growing importance of regional supply chain resilience and resource recovery initiatives within the mining industry.
Under the terms of the agreement, WBH will make a conditional one-time payment of $3 million (€2.61 million) to Almonty in exchange for the exclusive offtake rights to the tungsten material. The deal stipulates a minimum delivery of 1,720 tonnes of contained tungsten trioxide (WO3). This commitment is pivotal as Almonty prepares to reinstate and restart operations at its processing plant at Los Santos, marking a crucial step towards bringing a valuable European tungsten asset back into active production.
The Los Santos Mine: A Return to Production through Innovation
The Los Santos Mine, an open-pit scheelite skarn operation situated approximately 50 kilometers south of Salamanca in Spain, has been under planned care and maintenance since February 2020. Its reopening, facilitated by this agreement, represents a strategic pivot for Almonty. Rather than initiating new extraction from untouched ore bodies, the restart strategy for Los Santos is built around reprocessing stockpiled tailings – material that has already been mined and processed once. This approach offers several advantages, including potentially lower operational costs, a reduced environmental footprint compared to conventional mining, and a quicker pathway to production.
Almonty has indicated that ongoing testing has demonstrated improvements in tungsten trioxide recovery from these existing tailings, suggesting the potential for efficient and profitable extraction from a previously discarded resource. The company’s ability to leverage advanced processing techniques to recover value from what was once considered waste aligns with broader industry trends towards more sustainable and circular economy principles in mining. This innovative approach to resource recovery is not only economically sound but also environmentally responsible, reducing the need for new mining impacts while utilizing existing infrastructure.
Deal Mechanics and Financials: A $3 Million Catalyst
The financial framework of the agreement is designed to be mutually beneficial, providing Almonty with essential capital to recommission its Los Santos processing plant while securing a critical supply for WBH. The conditional one-time payment of $3 million from WBH serves as a significant catalyst for Almonty, enabling the necessary investments in equipment, infrastructure, and personnel to bring the plant back online efficiently. This customer capital support de-risks the restart process for Almonty and accelerates the timeline for resuming active production.
The multi-year, take-or-pay structure of the offtake agreement provides revenue stability and certainty for Almonty, guaranteeing a market for its tungsten concentrate output. For WBH, it secures a reliable and consistent supply of tungsten feedstock for its operations. This type of financial arrangement, where a buyer provides upfront capital in exchange for future supply rights, is increasingly common in the mining sector, particularly for critical minerals, as companies seek to solidify their supply chains and de-risk project development.
WBH's Strategic Imperative: Securing EU-Origin Tungsten
Wolfram Bergbau und Hütten (WBH), a wholly-owned subsidiary of Sweden’s Sandvik Group, plays a crucial role in the global tungsten market. WBH operates a sophisticated refining and powder manufacturing facility in St. Martin im Sulmtal, Austria, where it processes both primary tungsten concentrate and recycled secondary tungsten materials. As highlighted by Almonty chairman, president, and CEO Lewis Black, WBH stands out as the only integrated tungsten smelter outside of Asia and Russia. This unique position makes WBH a critical player in Western supply chains, striving for diversification and security of supply.
A key strategic driver for WBH in this agreement is gaining access to EU-origin tungsten feedstock. In an era of heightened geopolitical sensitivities and increasing scrutiny of supply chain provenance, securing materials from politically stable and ethically sound jurisdictions is paramount for Western industries. The Los Santos project, being located in Spain, offers a clear advantage in this regard, providing a transparent and verifiable source of tungsten concentrate. The inherent focus on recycling and resource recovery at Los Santos also aligns perfectly with WBH’s operational philosophy, where recycling is central to its integrated tungsten operations.
Navigating Geopolitical Shifts: US Defense Procurement Regulations
The timing of this agreement is particularly pertinent given anticipated regulatory shifts in major consuming markets. Significantly, new US defense procurement regulations are set to take effect on January 1, 2027. These regulations will expand existing restrictions on certain tungsten materials of Chinese, Russian, North Korean, or Iranian origin to include all feedstock sources, not just finished products. This impending change places a premium on tungsten supplies from non-restricted countries and secure supply chains.
By establishing a robust supply line from an EU-based mine to an EU-based integrated smelter, the Almonty-WBH partnership strategically positions both companies to meet the evolving demands for tungsten in defense and other critical sectors. The emphasis on EU-origin material provides a distinct competitive advantage, ensuring compliance with future regulations and mitigating geopolitical supply risks that have become a pervasive concern for governments and industries globally. This forward-looking approach to supply chain management demonstrates a keen understanding of the macro-environmental factors shaping the critical minerals landscape.
Almonty's Broader Vision and Tungsten Market Dynamics
The Los Santos agreement is part of a broader strategic initiative by Almonty Industries to solidify its position as a leading global tungsten producer. Almonty has been actively developing its portfolio, as evidenced by the start of processing plant throughput operations at its Sangdong Mine in South Korea’s Gangwon Province in July 2026. These concurrent developments highlight Almonty's commitment to expanding its production capacity and diversifying its operational footprint across key tungsten-producing regions.
Tungsten, renowned for its exceptional hardness, high melting point, and excellent tensile strength, is a critical mineral vital for a wide array of industrial applications. It is essential in the manufacturing of cutting tools, wear-resistant parts, electrical contacts, and components for the aerospace and defense industries. The global tungsten market is characterized by a significant concentration of primary production in a few countries, particularly China, which has historically dominated supply. This concentration has spurred a global push among Western nations to diversify supply sources and enhance the resilience of their critical mineral supply chains, making projects like Los Santos increasingly important.
Outlook: Reinvigorating a Key European Tungsten Asset
The partnership between Almonty Industries and Wolfram Bergbau und Hütten marks a pivotal moment for the Los Santos Mine and for European tungsten supply. This agreement not only provides a clear path for the mine to resume active production but also exemplifies a modern approach to resource recovery, emphasizing sustainability and efficiency through tailings reprocessing. By securing a long-term offtake agreement and essential restart capital, Almonty is well-positioned to bring a significant source of EU-origin tungsten back into the market.
For WBH, the deal ensures a secure and compliant supply of feedstock, reinforcing its role as a key player in the non-Asian/Russian tungsten processing landscape and strengthening its position ahead of new US defense procurement regulations. The collaboration serves as a model for how strategic partnerships, innovative operational approaches, and a keen understanding of global geopolitical and regulatory shifts can reinvigorate dormant assets and enhance the security of critical mineral supply chains for Western industries.
