Xiamen Tungsten Halts Luoyang Yulu Scheelite Output as CMOC Cuts Tailings Supply

Xiamen Tungsten disclosed on July 1, 2026 that its 60 percent-owned subsidiary Luoyang Yulu Mining has fully suspended production. The plant depends entirely on molybdenum tailings supplied by CMOC (China Molybdenum) as its raw material, and with those deliveries now halted, Yulu has no feedstock left to process. The company has not set a date for restarting, and the length of the shutdown remains open.

Luoyang Yulu operates as a joint venture created in the early 2000s to recover low-grade scheelite, a calcium tungstate ore, from the leftover tailings of CMOC's Sandaozhuang molybdenum mine in Luanchuan County, Henan Province. The site grew into the largest low-grade scheelite recovery line in China, with a processing capacity of roughly 15,000 tonnes of material per day. Because the operation has no ore body of its own, a single interruption in CMOC's tailings feed is enough to stop it completely. That structural reliance is the direct cause of the halt.

The volumes involved are modest. Luoyang Yulu produced 1,924 mt of scheelite concentrate on a tungsten (WO3) content basis in 2025 and sold 1,614 mt. In the first half of 2026 it produced 685 mt and sold 669 mt, a slower pace than the year before. Set against Chinese mine output of roughly 67,000 mt and world output near 85,000 mt, the site accounts for only a low single-digit share of national supply, under 3 percent. For Xiamen Tungsten, which reported 2025 revenue of 46.3 billion yuan and net profit of 2.3 billion yuan, the near-term hit to group earnings should be limited, though the company flagged an impact it could not yet quantify.

The timing matters more than the tonnage. China tightened tungsten export licensing in February 2025 and widened dual-use controls in early 2026, helping push prices to record highs. Domestic 65 percent scheelite concentrate peaked near 860,000 to 919,000 yuan per tonne in March 2026, then corrected by more than half into early June before recovering. As of July 1, 2026, market assessments placed 65 percent concentrate around 491,000 yuan per standard tonne, off the peak but still several times pre-2025 levels. The market is currently in weak consolidation, with smelters holding high inventories and buying only as needed, which cushions the immediate impact of losing Yulu's output.

The open question is why CMOC stopped the tailings deliveries, since the announcement gives no reason. CMOC is itself one of the largest tungsten producers in China, having reported 7,114 tonnes of tungsten output in 2025, and it has publicly advanced full particle-size tailings recovery work at Sandaozhuang. Even well below the March peak, the scheelite locked in those tailings remains highly valuable. CMOC captures only 40 percent of the value through the Yulu venture but would keep all of it by recovering the tungsten in-house. That commercial logic, alongside possible contract renegotiation or operational and environmental factors at the mine, is the most plausible driver and the key thread to watch.

For supply chain monitoring, the near-term market effect looks contained, but the episode signals a structural risk. It removes a steady low-grade recovery stream at a time when Chinese ore grades keep falling. Points to track include whether and when deliveries resume, whether CMOC redirects the tailings to its own recovery lines, any knock-on effect on other tailings-reprocessing operations, and the next round of long-term contract prices.