ERD, LGO: China Export Curbs Push Buyers to Unstudied Deposits

On 17 and 21 August 2026, Erdene Resource Development (ERD) and Largo (LGO) each told investors on their FY2026 Q2 earnings calls that molybdenum and tungsten assets carrying no current economic study — one still awaiting its first preliminary economic assessment, the other idle since 2012 — are drawing unsolicited offtake and acquisition interest [1][2]. China's export controls on both metals are the stated cause, and the buyers are reaching past the mines that are actually producing.

Why moly and tungsten supply does not answer a higher price

Molybdenum is an alloying element added to specialty steel for energy pipelines, defense equipment and construction; tungsten goes mainly into cemented-carbide cutting tools and ammunition. Both share an unusual supply structure: most of the world's molybdenum is recovered as a by-product at large copper mines rather than mined for its own sake, so output tracks copper ore grade rather than the molybdenum price, while tungsten mining and conversion have long been concentrated in China.

What changed is the export step. China placed molybdenum powders under export control in early 2025, covering roughly 40% of world production [3], and moved tungsten to licensed export from 4 February 2026, after which ammonium paratungstate in Rotterdam rose more than 200% year to date [4]. The US Commerce Department then issued a temporary final rule on 6 August 2026 bringing tungsten scrap and black mass exports under licence [5], closing the recycled route as well. A buyer trying to replace those units outside China finds incumbents unwilling to expand and by-product volumes set by copper grade, so the search moves up the chain to earlier, less certain assets.

What three companies disclosed

Erdene's Zuun Mod molybdenum project has not yet completed a preliminary economic assessment. On its 17 August 2026 call the company said it had received offtake interest from several potential counterparties across China, Korea and Japan, and had held preliminary funding discussions with major regional development banks. Its CEO said in the Q&A that end users would buy its concentrate today [1].

Largo's two tungsten assets sit further out still. Northern Dancer in Canada's Yukon and Currais Novos in Brazil have technical reports dating to 2011 and have been on care and maintenance since 2012. The company disclosed unsolicited expressions of interest in a 27 May 2026 press release [6], and its executive chairman attributed them on the 21 August call to China's restriction of tungsten exports, saying prices have risen tenfold since Largo last operated the Brazilian asset. He also said there is nothing to report yet on price or timing [2].

The numbers at the producing miners explain why buyers are going around them. Southern Copper disclosed on 22 July 2026 that molybdenum is now its first by-product at 11% of quarterly sales, with the average price up 43% to $29.44 per pound from $20.57 a year earlier — while molybdenum output fell 11% year over year on lower ore grades at all of its mines [7]. The price rose more than 40% and the volume fell about 10%.

The price reached the income statement, not the capital budget

For companies already in production, higher molybdenum prices show up first as unit-cost relief. Teck Resources said on 23 July 2026 that its copper net cash unit cost improved from $2.02 to $1.64 per pound, driven mainly by stronger by-product credits including molybdenum, silver and zinc [8]. The same day, Freeport-McMoRan put its sensitivity at approximately $85 million of annual EBITDA per $1 per pound change in molybdenum, while still underwriting the Bagdad expansion case at a $20 per pound molybdenum deck against a spot price near $30 [9]. The price moved current earnings without moving a capacity decision. The pricing point therefore shifts from who is producing to who holds ore outside China: what a buyer is paying for is provenance rather than a study that pencils out, which is why a transaction can precede the engineering.

That reading has a clear ceiling. After Trinity Metals doubled tungsten concentrate supply from its Nyakabingo mine in Rwanda to the US, a single mine accounts for up to 20% of US primary tungsten concentrate consumption [10] — the physical tonnage at stake is small, which caps what any one dormant deposit can be worth, and Largo still has no price or timing to report. What can be checked from here: whether Largo's tungsten assets produce a transaction with a stated price and date, whether Erdene converts offtake interest into signed agreements once its assessment is complete, and whether producing copper miners raise the molybdenum price they underwrite new projects at.

This change affects:

• Centerra Gold (CGAU): owner of the Thompson Creek mine and the Langeloth roasting facility, one of the few Western primary molybdenum complexes, with Thompson Creek in restart and first production expected in mid-2027 — the scarce non-Chinese primary capacity that could actually answer the deficit. Its 30 April 2026 call referred to Thompson Creek only as a development project and contained no mention of molybdenum at all [11].
• Taseko Mines (TGB): operator of the Gibraltar copper mine in Canada, where molybdenum is recovered as a by-product of copper processing, so the molybdenum price lands directly in its copper unit costs. Management noted on its 6 August 2026 call that moly prices have been back over $30 per pound recently [12]. It sits on the by-product side of this supply structure rather than among the parties that would build new primary molybdenum capacity.
• Nippon Tungsten (6998.T): a Japanese maker of cemented carbides and tungsten-based materials, buying exactly the non-Chinese primary tungsten that China's licensing restricts and the US scrap rule keeps out of the recycled route. Japan is one of the three buyer nationalities Erdene named, so both its input cost and its security of supply reprice with these rules.

Sources

[1] Drillr · Erdene Resource Development (ERD) · 2026-08-17 · Q2 FY2026 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 (LGO) · 2026-08-21 · Q2 FY2026 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 · industry news · https://goldinvest.de/en/tungsten-at-record-high-china-export-controls-drive-apt-price-explosion

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

[6] Newsfile · Largo (LGO) · 2026-05-27 · company press 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 · Q2 FY2026 earnings call

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

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

[10] Drillr · news search, "Tungsten Market Tightens Amid Export Controls and Deals" · 2026-06 to 2026-08 · industry news

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

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

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