EQ Resources is a tungsten producer. Credit: Logan Bush/Shutterstock.

EQ Resources, a tungsten producer with operations in Australia and Spain, has entered a binding heads of agreement to acquire the entire share capital of Tungsten Metals Group (TMG) and its subsidiaries.

The acquisition is valued at $13.5m and is expected to close in H1 2025.

This transaction will involve EQ Resources issuing an estimated 170 million shares and making a cash payment of $2.5m.

The completion of the acquisition is contingent upon shareholder approvals.

Both parties have agreed to an exclusivity period until 20 December 2024, during which due diligence will be conducted.

TMG owns and operates the largest ferrotungsten (FeW) plant outside of China, capable of producing up to 4,000 tonnes per annum.

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Located in Vĩnh Bảo, Haiphong Province, Vietnam, the facility has been operational since 2011, primarily serving as a toll treatment facility for third-party customers.

The plant’s competitive edge is attributed to Vietnam’s favourable cost structure, particularly in terms of electricity and labour costs, making it one of the most cost-effective operations in the industry.

The facility’s production capacity accounts for more than 80% of the ferrotungsten capacity outside China and Russia.

Ferrotungsten is an essential alloying agent in the production of specialty alloys, with significant demand from the defence, aerospace and automotive sectors.

This acquisition will position EQ Resources as a key player in the global supply of this critical material.

EQ Resources CEO Kevin MacNeill said: “EQR is pleased to announce the execution of a heads of agreement for the 100% acquisition of the TMG Group.

“This transaction aligns with EQR’s strategic initiatives to be the preeminent western tungsten producer. Upon completion of the transaction, EQR will have achieved a strategic diversification of products, customers and geography, and be proud 100% owner and operator of critical western tungsten operations on three continents.

“Additionally, EQR will have achieved vertical integration of our upstream operations, leveraging our substantial resource base and existing production output, throughout the tungsten supply chain.”