Key facts
- Elmet Group's unit received a $2 billion contract from the U.S. Defense Logistics Agency for tungsten supply.
- The contract includes a guaranteed funded commitment of $150 million.
- Tungsten is a critical mineral used in aerospace and defense equipment due to its heat resistance and hardness.
- Elmet Group secured $450 million from the U.S. Department of War for domestic manufacturing expansion.
- The $450 million investment includes an initial $200 million drawdown at closing.
- Elmet plans to invest over $165 million in facilities in Maine, Michigan, and Ohio.
Elmet Group announced on Monday that one of its subsidiaries has been awarded a contract valued at approximately $2 billion by the U.S. Defense Logistics Agency (DLA). The contract aims to rebuild the National Defense Stockpile and enhance the United States' tungsten supply chain.
The agreement includes a guaranteed funded commitment of $150 million and covers the supply of tungsten ores, concentrates, and sodium tungstate to DLA Strategic Materials. Tungsten is a critical mineral essential for aerospace and defense applications due to its high heat resistance and hardness.
Elmet stated that deliveries will commence only after securing additional supplies through mining investments, offtake agreements, and processing capacity expansions, ensuring that existing U.S. manufacturers' supplies are not disrupted. This move aligns with Washington's strategy to diversify tungsten sources and reduce dependence on China and Russia, especially given tightening global supply due to Chinese export restrictions and the lack of active U.S. tungsten mines.
In a separate development, Elmet also secured approximately $450 million from the U.S. Department of War. This funding is intended to accelerate domestic manufacturing expansion and strengthen partnerships within its tungsten supply chain. The investment comprises an initial $200 million drawdown upon closing, with further funding to follow. In exchange, the government will receive redeemable preferred equity, warrants for up to 19.9% of Elmet's common stock post-transaction, and rights to appoint a non-voting board observer and an independent director.
Elmet plans to allocate over $165 million towards upgrading facilities in Maine, Michigan, and Ohio to boost production capacity, increase tungsten output, and modernize infrastructure supporting U.S. defense, aerospace, and industrial sectors.