Traxys and Abenójar sign El Moto tungsten offtake deal

Traxys Europe and Abenójar Tungsten S.A. have formalized an exclusive, long-term offtake agreement for tungsten concentrate from Spain's El Moto project. This significant deal, announced on October 8, 2026, secures a vital supply of critical raw materials for global industries for at least ten years post-production commencement, directly addressing increasing concerns over global tungsten supply chain resilience, particularly given China's dominant market share and intensifying export controls. The El Moto project, designated as "strategic" under the EU Critical Raw Materials Act, is set to begin production in Q1 2029, with a forecast of over 4,000 tonnes per annum of contained tungsten trioxide.

Traxys Secures Long-Term Tungsten Offtake from Spain's Strategic El Moto Project Amidst Geopolitical Supply Concerns

In a move poised to significantly bolster the security of critical raw material supply chains for Western industries, Traxys Europe, a prominent unit of the global commodity trading and logistics firm Traxys Group, and Abenójar Tungsten S.A. have finalized an exclusive, long-term offtake agreement. Announced on October 8, 2026, this landmark deal grants Traxys sole distribution rights for tungsten concentrate produced at Abenójar’s El Moto project, located in Ciudad Real, Spain, for a minimum duration of ten years following the commencement of commercial production.

The agreement emerges at a pivotal time for global industrial sectors, as tungsten, an indispensable metal, faces increasing supply vulnerabilities due to its concentrated production landscape. This strategic partnership underscores a growing imperative among industrial nations to diversify their sources of critical minerals, ensuring stability and resilience in an increasingly complex geopolitical environment.

A Strategic Alliance for Critical Minerals

Under the terms of the comprehensive contract, Traxys Europe will assume responsibility for the global marketing, logistics, and distribution of all tungsten concentrate produced at the El Moto project. This integrated approach ensures a streamlined pathway from mine to end-user, leveraging Traxys’ extensive international network and expertise in commodity trading. The pricing mechanism for the tungsten concentrate will be dynamically linked to prevailing market conditions, specifically referencing the internationally recognized ammonium paratungstate (APT) price index, which serves as a key benchmark for the global tungsten market.

Mark Kristoff, CEO of Traxys, articulated the profound significance of this collaboration, stating, “This long-term agreement with Abenójar Tungsten reinforces Traxys’ commitment to securing responsibly sourced critical raw materials for our global industrial customer base. By partnering with a high-quality European deposit such as El Moto, we are ensuring that our customers in critical manufacturing, energy, and superalloy applications have dependable, long-term access to tungsten supply from secure, stable jurisdictions such as Spain.” Kristoff’s remarks highlight not only the commercial viability of the El Moto project but also its alignment with broader strategic objectives concerning supply chain security and responsible sourcing, which are increasingly paramount for industrial players across North America and Europe.

El Moto: A New Pillar in European Tungsten Supply

The El Moto project itself represents a significant development for the European mining landscape. Located in Ciudad Real, Spain, the project holds the prestigious designation of a “strategic project” under the European Union’s Critical Raw Materials Act. This classification underscores its vital importance to the EU’s economic and industrial base, signalling a level of regulatory and strategic support that can accelerate its development and operational stability. Furthermore, El Moto is positioned as one of the largest tungsten developments outside of China, a distinction that elevates its profile considerably in the global mining sector.

Construction activities at the El Moto site commenced in 2026, marking a critical milestone in bringing this strategic asset online. Abenójar Tungsten S.A. anticipates achieving first production from the project in the first quarter of 2029, initiating the flow of this crucial commodity into global markets. According to a definitive feasibility study completed in 2026, the project is forecast to achieve a steady-state production of more than 4,000 tonnes per annum (tpa) of contained tungsten trioxide in concentrate. This substantial output capacity is expected to make a material difference in diversifying the global tungsten supply pool.

Gonzalo García San Miguel, CEO of Abenójar Tungsten, also commented on the partnership, emphasizing the commercial validation and market access it provides. “Partnering with a leading global trading house such as Traxys provides El Moto with clear commercial validation and direct access to a global network of concentrate consumers and industrial end users of tungsten products,” San Miguel noted. This mutual benefit highlights how such offtake agreements are not merely transactional but are foundational to derisking large-scale mining projects and integrating them effectively into global supply chains.

Tungsten's Crucial Role and Geopolitical Landscape

Tungsten’s unique properties—including its exceptional hardness, high melting point, and excellent corrosion resistance—make it indispensable across a wide array of high-tech and strategic applications. These include:

Aerospace: Used in engine components, turbine blades, and high-temperature alloys due to its heat resistance.
Defence: Critical for armour-piercing munitions, missile components, and specialized weaponry.
Energy Transition: Essential in the production of drilling tools for geothermal energy, components for nuclear reactors, and potentially in advanced battery technologies.
Industrial Tooling: The primary component in cemented carbides, crucial for cutting tools, drills, and wear-resistant parts used in manufacturing and construction.

Despite its critical importance, the global supply chain for tungsten is remarkably concentrated. China currently accounts for approximately 80% of the world’s tungsten production. This overwhelming concentration of supply, combined with intensifying export controls from Beijing, has created significant vulnerabilities for Western industrial consumers, leading to heightened concerns over supply security and price volatility. The European Union, in particular, has been proactive in identifying tungsten as a critical and strategic raw material, pushing initiatives like the Critical Raw Materials Act to foster domestic supply and diversify international partnerships.

The development of projects like El Moto in stable, secure jurisdictions such as Spain directly addresses these geopolitical and supply chain risks. It represents a tangible step towards building greater resilience and autonomy in the supply of materials vital for advanced manufacturing and national security objectives.

Market Dynamics and Pricing Mechanisms

The global tungsten market is largely influenced by the supply and demand dynamics of ammonium paratungstate (APT), which is the most commonly traded intermediate tungsten product. The agreement between Traxys and Abenójar Tungsten to base concentrate pricing on the APT index ensures transparency and alignment with prevailing market conditions. This mechanism also offers a degree of flexibility for both parties to adapt to fluctuations in the volatile commodity market.

New supply sources, especially those outside the dominant producing regions, typically contribute to a more diversified and potentially more stable market. As El Moto ramps up production, its forecasted 4,000 tpa of contained tungsten trioxide will add a significant new volume, which, while not fundamentally altering the overall global supply balance in isolation, will provide crucial diversification for specific industrial buyers in Europe and North America seeking non-Chinese sources. This diversification is highly valued, often commanding a premium for its reliability and security.

Future Outlook and Downstream Potential

Looking ahead, the agreement between Traxys and Abenójar Tungsten also incorporates a forward-thinking provision. It offers flexibility for Abenójar Tungsten should the company decide to develop downstream processing capabilities in the future. This clause allows for a portion of El Moto’s production to be supplied directly to any potential future processing operations, thereby enabling Abenójar to potentially move up the value chain and capture additional economic benefits within Spain.

The successful development and operation of the El Moto project, backed by a robust offtake agreement with a global trading powerhouse like Traxys, sends a strong signal to the broader mining industry and investment community. It highlights the viability of developing critical raw material projects in Europe and demonstrates how strategic partnerships can mitigate risks and unlock significant value. As the global demand for tungsten continues to grow across strategic sectors and the push for supply chain resilience intensifies, projects like El Moto will play an increasingly vital role in ensuring the long-term sustainability and competitiveness of industrial economies worldwide.