Carbine Tungsten has put its flagship tungsten project on ice despite a big surge in price for the war metal.

Tungsten’s price has increased 80 per cent to $US269 per metric tonne from a low last year of $US150.

The price has been driven up by supply cutbacks in China, which produces 80 per cent of tungsten. China has recently clamped down on polluting mines and has enforced production quotas.

However the price surge has not generated significant interest in the sector, said Carbine Tungsten (ASX:CBQ) chairman Russell Krause.

“The uncertainties surrounding the geopolitical situation in North Korea has seen the tungsten price recently climb rapidly,” he said. “However, offtake [sales] or project funding interest is expected to focus on a longer term elevated price sustainability.”

Carbine has now ceased operations at Mt Carbine, placing it in “care and maintenance” mode.

The company is at loggerheads with Mt Carbine Quarries (MCQ) which holds mining and other licences at Mt Carbine. Carbine holds a sub-lease over the tenements held by MCQ.

Carbine had intended to buy the project from MCQ. However, talks to resolve issues around the sub-lease arrangement have failed.  The company is still in talks MCQ to resolve the issue.

Further, Carbine revealed that MCQ has somehow increased its landholding on site to now cover around 60 per cent of the mining leases.

“This will clearly impact the scale of any future mining operation which can be conducted on this site,” Krause said.

Despite this, Carbine has delineated surface extent of the Iron Duke scheelite prospect with the greater part of the prospect lying outside the MCQ mining lease and within its wholly owned landholding.

The company is planning to lodge a mining lease over this prospect.

While all this is going, Carbine is progressing with its diversification away from tungsten to other metals including gold and lithium.

The company has bought gold exploration license last year in New South Wales with surface sampling of historic workings at Panama Hat prospect finding consistent high-grade gold. A drilling campaign is expected to be completed in the next quarter.

To reflect this change of tack, Carbine is also pursuing a name change with investors to vote on it at the company’s upcoming AGM.

Investors weren’t happy with today’s news with the stock finishing 17 per cent lower at 1c.

Tungsten market

Tungsten is used to harden steel in ballistic missiles and drill bits has witnessed supply cutback issues in China, which produces 80 per cent of global tungsten.

The Chinese government is clamping down on polluting mines and enforcing production quotas.

Plus, geopolitical tensions between the United States and North Korea have seen the price spike further.