BEIJING — China dominates the supply chain for many of the world's critical minerals, but so far it's held off on sweeping restrictions on at least one: tungsten.

The metal is and has a high energy density. That's made tungsten an important material in weapons, autos, electric car batteries, semiconductors and industrial cutting machines. Chipmakers such as and both use the metal.

"I don't expect any saber-rattling over tungsten," said Lewis Black, CEO of Canada-based Almonty Industries. The company said it's spending at least $125 million to reopen a tungsten mine in South Korea later this year.

"If you get too belligerent about diversification, [it becomes a situation that's] biting the hand that feeds you," he said, adding that "tungsten has always been a diplomatic metal."

While the Biden administration in May, China this past weekend did not include the metal in for boosting its oversight of domestic rare earths production.

"The tariffs were more of a warning shot, as Biden only put tariffs on three of the 25 strategic metals China exports," Black said.

"But China might not be too concerned, because the Chinese government ignored the new tariffs, unlike in the past when they restricted some exports of rare earths. They completely ignored it because the Chinese don't want tensions to rise."

Asked last month if China would retaliate to the latest U.S. tariffs on tungsten, China's Ministry of Commerce spokesperson He Yadong didn't announce countermeasures. Instead, he called on the U.S. to remove the additional duties.

Commodity price reporting and analytics company earlier this year that China has reduced national production quotas for its tungsten mines due to .

Still, Black expects his company to benefit from growing efforts to diversify away from China. Almonty claims the forthcoming mine in South Korea has the potential to produce 50% of the world's ex-China tungsten supply.

Demand for non-Chinese tungsten is already on the rise.

"We see in the U.S., in Europe, they ask their suppliers for a China-free supply chain," said Michael Dornhofer, founder of metals consulting firm Independent Supply Business Partner.

The U.S. REEShore Act — or Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022 — starting in 2026, while the European Commission last year on imported Chinese tungsten carbide for another five years, Almonty Industries pointed out in a report.

The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party last month on the U.S. critical minerals policy.

Expectations for higher demand and limited supplies of tungsten have pushed prices to multi-year highs, although they have tapered off in the last several weeks.

Dornhofer said in an interview in late May that he was also seeing Chinese buyers increasing their tungsten purchases.

"Since the beginning of this year, they are not only asking for Western concentrate, but they are buying significant volumes, paying even more than Western companies are willing to pay," he said. "Definitely [going to be] a game changer."

Back in January, U.S.-based research firm : "We're approaching an inflection point in tungsten supply. The US will quickly run out of stockpiled tungsten and flip from net seller to buyer over the next 12-18 months."

The U.S. Bureau of Industry and Security at the Department of Commerce did not immediately respond to a CNBC request for comment on this story.

Brandon Beylo, head of investment research at Macro Ops, told CNBC in an email there are only six companies in the U.S. with capacity to produce tungsten. He added that the U.S. hasn't produced tungsten domestically since 2015, meaning future U.S. supply must come from overseas.

He said the firm doesn't own tungsten-related stocks, but that he's personally looking for ways to access the physical commodity. There are no futures for trading tungsten.

China dominates over 80% of the tungsten supply chain, although local production costs are rising as the mines age, according to Argus, noting Chinese imports of the metal from North Korea, central Africa and Myanmar.

"This presents an opportunity for projects outside China," Mark Seddon, principal, consulting and analytics at Argus, said in a .

Other non-Chinese companies in the tungsten supply chain are going to South Korea.

In February, IMC Endmill, an affiliate of Warren Buffett-owned IMC Group, signed an agreement with the Daegu city government for a 130 billion Korean won ($93.6 million) investment in a tungsten powder manufacturing facility, according to a .

IMC Group did not immediately respond to CNBC's request for comment.

China's dominance in global critical minerals supply chains has been built up over several decades.

Dornhofer pointed out that efforts to produce tungsten outside of China have languished for years, including plans for a mine in New Brunswick, Canada, that would have significantly increased global tungsten capacity.

All these projects have been on the table since 20 years ago, he said. "When people tell you in two years, three years they will be in operation, it's a question of whether you believe them. On the other [hand], the tungsten is in the ground. It's still there."

Almonty claims to be the biggest producer of tungsten outside China and right now, primarily operates in Portugal and Spain. The forthcoming mine in Sangdong, South Korea, closed in the 1990s.

After the mine reopens later this year, Black expects his company will account for only 7% or 8% of global tungsten supply.

"We're not crowding out any Chinese," he said. "We don't intend to."

"Now if we're going to produce 30% to 40%, I'm taking a battle with China, which wouldn't be a smart thing to do."

Clarification: Almonty clarified that the investment to reopen the tungsten mine in South Korea is now $125 million.