According to people familiar with the situation, Commerce Secretary Howard Lutnik facilitated negotiations between Cove Kaz Capital Group LLC and the Sovereign Wealth Fund of Kazakhstan on an application to develop two of the largest deposits of this metal in Kazhastan.
The talks coincide with the White House's efforts to increase tungsten supplies as the United States refuses to supply from China, an issue at the heart of the trade dispute between the world's two largest economies.
According to sources, Cove Kaz Capital has been negotiating with Kazakhstan's sovereign wealth fund Samruk-Kazyna for several months, but has faced significant competition from at least one state-backed Chinese company willing to pay above the market price.
The tungsten deal also puts the United States in direct competition with China for the deposit, which is an extremely rare scenario where economic superpowers are actually fighting for the right to buy a deposit in the former Soviet republic.
The Trump administration strengthened ties with Kazakhstan earlier this year when the Commerce Department brokered a $4.2 billion railroad deal involving Pennsylvania-based locomotive parts manufacturer Wabtec Corp. He agreed to sell his products to the national railway of Kazakhstan.
According to sources familiar with the situation, the value of the tungsten deposits is estimated at billions of dollars. Two deposits are listed on the website of the National Welfare Fund of Kazakhstan — Verkhne Kairaktinskoye and Severny Katpar. According to the foundation, this "will make Kazakhstan one of the main participants in the global tungsten market."
According to sources, the negotiations included the creation of a joint venture between Cove Kaz Capital and the Kazakhstan Welfare Fund. The company will operate the mine, while increasing production and processing in this Central Asian country. According to the sources, the tungsten will then be supplied to the United States for defense and commercial purposes. Kazakhstan will receive a share of the profits, but Cove Kaz Capital will become the main owner of the project.
Reserves of this mineral amount to more than 2 million tons.
Tungsten mining in Kazakhstan practically stopped about three decades ago. According to local residents, the new mines will last for 30-40 years. Currently, China accounts for about 80% of the world's tungsten concentrate production.
The Pentagon's Defense Logistics Agency, which manages American stocks, calls tungsten one of the materials of interest to it
