Xiamen Tungsten filed arbitration against China Molybdenum (CMOC) with the Beijing Arbitration Commission on September 21, 2026, seeking roughly CNY 116 million over a supply cutoff at their joint venture, Luoyang Yulu. CMOC stopped supplying tailings to the JV from June 30, 2026, halting its production entirely. The reason CMOC gave was mining-quota compliance — but the same quota policy has applied unchanged since 2023, and the joint venture operated normally under it as recently as 2025. What changed between 2025 and 2026 wasn’t the policy. It was the price.
What Happened
Luoyang Yulu is a tailings-recovery joint venture, 60% owned by Xiamen Tungsten and 40% by CMOC, running since 2001 on a contract that extends to 2032. Its business is straightforward: recovering scheelite concentrate from tailings CMOC’s own mining operation has already processed once. CMOC has supplied that tailings feed for over two decades, including a normal, full quota allocation in 2025.
On June 30, 2026, CMOC stopped. Xiamen Tungsten says this shut the joint venture down completely. CMOC’s public response cited compliance with national quota-management rules for tungsten mining as its bottom line.
Xiamen Tungsten’s claim splits into two parts:
| Claim component | Amount (CNY) |
|---|---|
| Losses from the supply cutoff | 56.4454 million |
| Losses from suspended sales | 56.767 million |
| Total claimed | ~116 million |
Data and sources: based on publicly available data on the internet, compiled for general information only.
The Timing Problem
The quota system China uses to manage tungsten mining hasn’t distinguished between primary mining and comprehensive utilization since 2023. In 2024, national guidance required provinces to set up a formal quota allocation and adjustment mechanism. In 2025, CMOC’s Luanchuan County allocation was 6,150 tons, the joint venture ran normally the entire year, and Luoyang Yulu posted a full-year net profit of CNY 123 million.
Then tungsten prices moved. Domestic tungsten concentrate output fell 14.75% year-on-year in the first half of 2026, while demand from PCB drilling, photovoltaic tungsten wire, and military stockpiling kept climbing. Concentrate prices went from roughly CNY 137,500/ton in September 2024 to CNY 409,300/ton in September 2026 — a near-200% move, with a spike to over CNY 1,051,200/ton in March 2026.
Luoyang Yulu’s H1 2026 net profit was CNY 336 million, already ahead of all of 2025 in six months. CMOC’s own tungsten segment gross margin reached 77.48%, up over 13 percentage points year-on-year. The supply cutoff landed in the exact window where the joint venture’s profit doubled and CMOC’s own tungsten margins hit a multi-year high — not when the quota policy was introduced, and not when prices were flat.
Two Policies, One Convenient Reading
China’s tungsten mining quota system exists to prevent over-extraction. A separate provision — Article 39 of the Mineral Resources Law that took effect in July 2025 — explicitly encourages comprehensive recovery of minerals from tailings and requires protective measures for tailings that still contain useful material. Recovering scheelite from tailings, which is exactly what Luoyang Yulu does, sits inside what that law encourages, not what the quota system restricts.
The two objectives aren’t inherently in conflict, and there are compliant middle paths between them — adjusting how a quota is allocated, phasing output differently, renegotiating terms with a joint-venture partner. Based on what’s public, CMOC didn’t pursue any of those. It went straight to a full cutoff, and hasn’t disclosed whether it exhausted other compliant options first or whether it negotiated with Xiamen Tungsten before doing so. Those missing details are what the arbitration tribunal will need to weigh.
What the Tribunal Actually Has to Decide
Xiamen Tungsten’s arbitration request asks the tribunal to confirm CMOC must keep performing its contractual obligations — meaning this isn’t only about damages. It’s about whether a 25-year-old contract, signed in 2001 and running to 2032, still binds a party once the price of what it covers has moved by an order of magnitude.
If the tribunal rules that policy compliance can justify unilaterally ending a long-term supply contract, that becomes a template: any upstream holder of a strategic resource can potentially exit or renegotiate a contract once prices move far enough in its favor. If it rules the other way, contract holders on the other side of similar long-term deals gain a meaningful precedent for enforcement.
What This Means If You Hold a Tungsten Contract
This case isn’t really about Xiamen Tungsten and CMOC. It’s a live test of whether a long-term tungsten supply agreement is worth the paper it’s signed on once the underlying commodity re-rates hard. For anyone in India buying, selling, or holding standing arrangements tied to Chinese tungsten supply — directly or through a trader — the practical read is: a long-term price or supply commitment from a Chinese counterparty is not more reliable than the counterparty’s incentive to keep it. Build that into how much certainty you price into any multi-month arrangement, and don’t assume a signed term survives a large enough move in your counterparty’s favor.
This also sits alongside the pattern already visible in China’s own long-term contract prices this month — two LTC cuts in eight days, most recently the September 28 Guangdong cut that followed the September 21 Chongyi cut. Contract prices moving with the market, not against it, is the same underlying story: fixed terms hold only as long as they suit the stronger side.
Is this the first time a Chinese tungsten producer has cut supply over stated compliance requirements?
Not necessarily the first, but it’s the first case of this scale and visibility to reach formal arbitration with public financial disclosure attached, which is what makes it a usable precedent rather than an anecdote.
Does this affect current Indian tungsten scrap and carbide prices directly?
Not directly — this is a domestic Chinese contract dispute, not a price move. Its relevance to India is about counterparty and contract risk on anything tied to Chinese supply, not this week’s price level. For current levels, see India Market Rates and the Global Tungsten Price Hub.
Full weekly decode — signal read, timeline framework, and the complete India/China/Rotterdam breakdown — goes out to WolfTrack subscribers every Thursday by 8 PM IST.
Sources: Public arbitration and company-disclosure reporting, September 2026.
