EQ Resources has landed five long-term offtake agreements worth about $195 million and covering the next 24 months’ production from its tungsten operations in Far North Queensland and Spain.

The company tied up its long-term offtake contracts in a period of rising tungsten prices.

EQ Resources pointed to a 13 per cent increase in the past year, saying also there had been week-by-week improvements since the announcement last month of Chinese export controls which led to a complete halt of exports of a majority of tungsten products from that source.

EQ Resources produces tungsten concentrate at the Mount Carbine site in Far North Queensland as well as the Saloro tungsten operation in Spain.

“The recent price increases have been fuelled by the China export control, resulting in great uncertainty for downstream customers,” EQ Resources chief executive officer Kevin MacNeill said.

“This in turn has led to customers looking to lock in future supply via long-term offtake arrangements. There is currently no timeline announced by when exports from China will resume.”

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Based on the current pricing for tungsten, the total value of the offtake agreements is estimated to be $US124 million (about $A195 million).

They represent volumes of 470 containers holding 20 metric tonnes each of 50 per cent tungsten trioxide concentrate.

The buyers are described as being in the Top 3 producers in their respective markets, covering the production of APT (ammonium paratungstate), tungsten oxide and tungsten carbide materials – all of which are subject to the recent export restrictions from China.

Through those allocations, the company will supply about 25 per cent of its production into Europe and 25 per cent into North America, with the balance supplied to Asia.

‘EQR’s production forecasts will cover product required to be delivered as part of these agreements as well as product required to support the operations of the proposed acquisition of the ferrotungsten smelter in Vietnam,’ the company stated in an update to the ASX.

EQ Resources is continuing discussions for the acquisition of Tungsten Metals Group, which owns and operates the largest ferrotungsten plant outside of China.

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