Analysis of Supply Chain Security Guarantee from 70% Self-Sufficiency Rate of Tungsten Resources of Zhongwu Hi-Tech

Based on the collected information, I will systematically analyze how Zhongwu Hi-Tech’s 70% tungsten resource self-sufficiency rate effectively guarantees supply chain security.

---

Zhongwu Hi-Tech (Stock Code: 000657.SZ), as the operation and management platform for the tungsten industry under China Minmetals, has built a complete integrated tungsten industrial chain of “

”. The tungsten resources held by the company (including entrusted management) amount to 1.23 million tons, accounting for 11% of China’s proven tungsten resources, with significant industrial chain synergy advantages [1][2].

Segment	Production Capacity	Industry Position
Tungsten Mining and Dressing	Shizhuyuan produces nearly 8,000 tons of tungsten concentrate annually	World’s largest operating single tungsten mine
Smelting and Processing	Annual APT production capacity of approximately 8,500 tons	World’s largest operating APT supplier
Cemented Carbide	Annual output exceeds 7,500 tons	Ranked first globally
CNC Inserts	Annual output exceeds 65 million pieces	Ranked first in China

Zhongwu Hi-Tech has significantly increased its tungsten resource self-sufficiency rate to approximately 70% through

:

• Target Asset
  : 100% equity of Shizhuyuan Company
• Resource Endowment
  : Proven reserves of 190 million tons, with 560,000 tons of tungsten metal resources, accounting for over 30% of China’s tungsten resource reserves, ranking first globally in industrial mineable reserves
• Main Products
  : Tungsten concentrate, molybdenum concentrate, bismuth concentrate, fluorite concentrate, tungsten oxide, ammonium paratungstate, etc.
• Annual Production Scale
  : Nearly 8,000 tons (standard tons) of tungsten concentrate, over 300,000 tons of fluorite

• Transaction Consideration
  : RMB 821 million for 99.97% equity
• Resource Reserves
  : Proven tungsten metal reserves of 154,500 tons
• Annual Production Scale
  : Approximately 2,600 tons of tungsten concentrate

The company also manages 3 tungsten mines entrusted by China Minmetals Group, with an estimated total annual tungsten concentrate output of approximately 14,000 tons. With the continuous injection of entrusted mines into the company,

[3][4].

A 70% resource self-sufficiency rate means that 70% of the company’s tungsten raw material demand can be met by its own mines, which has important strategic significance in a market environment with volatile tungsten prices:

1. Cost Stability
   : The cost of self-mined tungsten concentrate is relatively fixed, effectively hedging against market price fluctuation risks
2. Supply Continuity
   : Own mines are not affected by external supply chain disruptions, ensuring production continuity
3. Quality Controllability
   : Stable quality of self-owned ore sources is conducive to consistency control of high-end products

Upstream (Tungsten Mining and Dressing) → Midstream (Smelting and Processing) → Downstream (Cemented Carbide and Cutting Tools)
     ↓              ↓               ↓
  Shizhuyuan, Yuanjing Tungsten Industry  Chenzhou Wupeng Branch  Zhuzhou Cemented Carbide, Jinzhou, Zhuzhou Diamond Cutting Tools

• High Comprehensive Resource Utilization Efficiency
  : Shizhuyuan Company has more than 100 mineral varieties, realizing comprehensive recovery of multiple metals
• Strong Risk Resistance
  : Profits from each segment of the industrial chain complement each other, smoothing cyclical fluctuations

In February 2025, the Ministry of Commerce and General Administration of Customs of the People’s Republic of China issued a notice to implement export controls on items related to tungsten, tellurium, bismuth, and molybdenum [5]. As the “industrial teeth” and “war metal”, tungsten has the following strategic attributes:

Physical Property	Application Scenario	Strategic Value
Melting point of 3422℃ (highest among metals)	Aerospace engines, rocket nozzles	Irreplaceable
Hardness second only to diamond	Cutting tools, armor-piercing bullet cores	Rigid demand material
Density close to gold	Nuclear reactor shielding materials	National defense strategic material

:

• Export controls have pushed up international tungsten prices, expanding the price gap between domestic and international markets (the price of tungsten powder in the European market is over 60% higher than that in China)
• The first batch of tungsten mining indicators in 2025 decreased by 4,000 tons year-on-year (a decrease of 6.5%), leading to continuous tightening on the supply side
• As a core supplier of domestic tungsten resources and high-end products, Zhongwu Hi-Tech has become a “stabilizer” for the global tungsten supply chain [6]

China’s tungsten industry presents a clear

:

Enterprise	Degree of Industrial Chain Integration	Core Advantages
Zhongwu Hi-Tech	Entire industrial chain (mining-smelting-processing)	Shizhuyuan Mine + leading cemented carbide enterprise
Xiamen Tungsten Industry	Entire industrial chain	Tungsten, molybdenum, rare earth + photovoltaic fine tungsten wire
Zhangyuan Tungsten Industry	Relatively complete industrial chain	Low self-sufficiency rate, small scale
Xianglu Tungsten Industry	Relatively complete industrial chain	Low self-sufficiency rate, small scale

In the first half of 2025,

, with a significant increase in profit contribution from the resource side [2][4].

• Has the only national key laboratory for cemented carbide in China’s tungsten industry
• 8 national high-tech enterprises, 4 national manufacturing single champion enterprises
• A total of 1,777 valid patents, and presides over a number of national/industry standards

Indicator	2021	2024	Growth Rate
Net Profit Attributable to Parent Company	RMB 528 million	RMB 939 million	77.8%
Operating Revenue	—	RMB 14.7 billion	48% increase compared to 2020
Total Assets	—	RMB 17.416 billion	77% increase compared to the beginning of 2021

In the first three quarters of 2025, the company achieved operating revenue of RMB 12.76 billion, a year-on-year increase of 13.4%; net profit attributable to parent company of RMB 850 million, a year-on-year increase of 18.3% [2].

Year	Net Profit Attributable to Parent Company	Year-on-Year Growth Rate	Core Driver
2025E	RMB 1.34 billion	42.9%	Rising tungsten prices + production capacity release
2026E	RMB 1.75 billion	30.2%	Reaching full production of Yuanjing Tungsten Industry
2027E	RMB 2.06 billion	17.6%	Completion of technical transformation of Shizhuyuan

The 70% tungsten resource self-sufficiency rate of Zhongwu Hi-Tech effectively guarantees supply chain security through the following mechanisms:

1. Independent and Controllable Resource Side
   : Own mines meet 70% of raw material demand, avoiding risks of external supply disruptions
2. Entire Industrial Chain Synergy
   : The integration of resource-smelting-processing enhances overall risk resistance and cost control capabilities
3. Release of Policy Dividends
   : Against the background of export controls and tightening mining quotas, the value of resource-based enterprises highlights
4. Reinforced Technical Barriers
   : R&D platforms such as the only national key laboratory in the industry strengthen the competitiveness of high-end products

With the continuous injection of entrusted mines and the commissioning of the 10,000-ton technical transformation project of Shizhuyuan (expected to be completed in 2027), the company’s tungsten resource self-sufficiency rate is expected to further increase to a higher level. Against the background of the structural supply-demand gap caused by continuous tightening of tungsten supply and continuous growth in demand, Zhongwu Hi-Tech’s supply chain security margin and long-term investment value will continue to be strengthened.

---

[1] Securities Times - “Zhongwu Hi-Tech: Improving the Layout of the Entire ‘Resource — Smelting — Processing’ Industrial Chain” (2025-12-18)
[2] Zhongwu Hi-Tech 2025 Semi-Annual Report - Tungsten concentrate output of 4,200 tons, APT output of 8,500 tons, cemented carbide output exceeding 7,500 tons
[3] China Galaxy Securities - In-Depth Report “Leading Integrated Tungsten Enterprise, Mine Injection Opens a New Chapter” (2025-12-26)
[4] Huayuan Securities - “Zhongwu Hi-Tech (000657.SZ) Q3 Profit Hits a New High in the Same Period, Tungsten Mine Injection Continues to Advance” (2025-10-31)
[5] Announcement No. 10 of 2025 of the Ministry of Commerce and General Administration of Customs - Implementing export controls on items related to tungsten, tellurium, bismuth, and molybdenum (2025-02-04)
[6] Fortune Account - “Strategic Asset Reassessment Under the Background of Metal Price Surge and ‘War Metal’ Attribute” (2026-01-07)