Erdene (ERD), Largo (LGO): Tungsten and Molybdenum Buyers Reach Undeveloped Mines

On 17 and 21 August 2026, Erdene Resource Development (ERD) and Largo Inc. (LGO) each told a quarterly earnings call that overseas buyers had come to them unprompted about molybdenum and tungsten ground that is not in production [1][2].

China licensed the metal, and Western supply cannot answer the price

Molybdenum and tungsten both harden steel, cutting tools and cemented carbides. Molybdenum also goes into oil and gas pipe and defense equipment, and has recently started appearing in the interconnect wiring inside memory chips. Most of the capacity for both metals sits in China. In early 2025 China restricted exports of molybdenum powders, covering roughly 40% of world production [3]. From 4 February 2026 tungsten exports moved to a licensing regime, after which exports of ammonium paratungstate (APT), the main tungsten intermediate, fell from 782 tonnes in 2024 to 243 tonnes in the first eleven months of 2025, and the Rotterdam APT price rose above $3,000 per tonne, up more than 200% year to date [4].

Western supply should have followed the price up, and it has not. Most of the world's molybdenum comes out as a by-product of copper mining, so the volume is set by the grade of the copper ore rather than by the molybdenum price, and the copper miners collect a cost credit instead of mining more copper for the molybdenum. On 6 August 2026 the US Commerce Department's Bureau of Industry and Security issued a temporary final rule requiring a license to export tungsten scrap and black mass, narrowing the recycled route as well [5]. With producers unable to add units and scrap harder to obtain, buyers have gone around them to ground that has been idle for years and carries no current economic study.

Offtake interest arrives before the first economic study

Erdene is an exploration company working in Mongolia, and its Zuun Mod molybdenum project is not scheduled to complete its first preliminary economic assessment (PEA, the earliest economic study a mining project produces) until the second half of 2026. On 17 August its CFO said the company had already received offtake interest from several potential counterparties in China, Korea and Japan, and that regional development banks had expressed interest as well — all of it ahead of the PEA [1]. Largo describes the same behavior on the tungsten side: Currais Novos, a Brazilian tailings reprocessing operation shut since 2012, and Northern Dancer, a tungsten-molybdenum deposit in the Yukon with only a 2011 technical report, drew unsolicited offers without the company running any sale process, and on 21 August its executive chairman said tungsten prices had risen tenfold since Largo last operated [2][6].

The supply side explains why buyers have to work this way. Southern Copper realized $29.44 per pound for molybdenum in the second quarter, 43% above the $20.57 of a year earlier, while its molybdenum production fell 11% in the same quarter because ore grades declined at all of its mines. Molybdenum has now displaced silver as its largest by-product and accounts for 11% of sales [7].

The price shows up in unit costs, not in expansion plans

Freeport-McMoRan disclosed that each $1 per pound move in molybdenum is worth roughly $85 million of annual EBITDA, and it still runs the Bagdad expansion case at $20 per pound while spot sits near $30 [8]. Teck Resources reported copper net cash unit costs falling from $2.02 to $1.64 per pound and attributed the improvement to by-product credits including molybdenum [9]. The price signal has stopped at cost and current earnings rather than turning into new capacity commitments. The control point therefore moves from who is producing to who holds the ground, and what can be checked from here is the count and terms of transactions — offtake contracts, option agreements, claim and permit transfers, and whether Freeport raises the deck in its expansion case — rather than tonnes.

There is a limit to this. Tungsten volumes are small in absolute terms: concentrate from a single Trinity Metals mine in Rwanda already accounts for about 20% of US primary tungsten concentrate consumption [10], which caps what any one dormant deposit can be worth. Largo itself said there is nothing yet to report on price or timing [2].

Companies exposed to this change

• Centerra Gold (CGAU): It owns the only primary molybdenum complex in the West outside Freeport — the Thompson Creek mine and the Langeloth roaster — with first production targeted for mid-2027, yet its 30 April 2026 earnings call does not contain the word molybdenum anywhere [11]. It is the company most likely to falsify the supply half of the argument above.
• Taseko Mines (TGB): The molybdenum by-product credit at its Gibraltar copper mine is pulling down its copper unit costs, and management noted on 6 August that molybdenum prices were back above $30 per pound [12]. Its molybdenum grades have been rising, which runs against the falling-grade explanation of supply.
• Nippon Tungsten (6998.T): This Japanese maker of cemented carbides and tungsten materials buys exactly the non-Chinese primary tungsten that China's licensing regime and the US scrap rule have tightened at the same time, placing it downstream where purchase cost and security of supply are both felt.

Sources

[1] Drillr · Erdene Resource Development (ERD) · 2026-08-17 · FY2026 Q2 earnings call

We're on the border of the largest consumer who's in deficit. They put export controls on molybdenum. In our discussions with those users, end users, they'd buy our concentrate today.

[2] Drillr · Largo Inc. (LGO) · 2026-08-21 · Q2 2026 earnings call

[3] Norwest Exploration and Mining Services · Australian molybdenum supply 2026 · 2026-07-07 · industry research · https://www.norwestexploration.com.au/news/australian-molybdenum-supply

[4] GOLDINVEST · Tungsten at record high: China export controls drive APT price explosion · 2026 · market report · https://goldinvest.de/en/tungsten-at-record-high-china-export-controls-drive-apt-price-explosion

[5] Recycling Today · US Commerce Department BIS temporary final rule restricting tungsten scrap and black mass exports · 2026-08-06 · policy report · https://www.recyclingtoday.com/news/commerce-department-moves-to-restrict-black-mass-tungsten-scrap-exports/

[6] Largo Inc. · Largo Announces Plans to Evaluate Strategic Alternatives to Maximize Value of Its Tungsten Assets in Canada and Brazil · 2026-05-27 · company release · https://www.newsfilecorp.com/release/299146/Largo-Announces-Plans-to-Evaluate-Strategic-Alternatives-to-Maximize-Value-of-Its-Tungsten-Assets-in-Canada-and-Brazil

[7] Drillr · Southern Copper (SCCO) · 2026-07-22 · FY2026 Q2 earnings call

[8] Drillr · Freeport-McMoRan (FCX) · 2026-07-23 · FY2026 Q2 earnings call

[9] Drillr · Teck Resources (TECK) · 2026-07-23 · FY2026 Q2 earnings call

[10] Drillr · news_search · Trinity Metals tungsten concentrate supply to Global Tungsten & Powders · 2026 · news

[11] Drillr · Centerra Gold (CGAU) · 2026-04-30 · FY2026 Q1 earnings call

[12] Drillr · Taseko Mines (TGB) · 2026-08-06 · FY2026 Q2 earnings call

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