Elmet Group, a manufacturer supplying critical materials and high-power microwave products to the aerospace and defense sectors, announced on Monday that it has secured a $450 million investment commitment from the US Department of War to expand its tungsten mining, processing, and manufacturing capacity. Additionally, its wholly-owned subsidiary, Elmet Technologies, was awarded a contract worth up to $2 billion by the Defense Logistics Agency to supply tungsten materials for the US National Defense Stockpile. Following the news, Elmet Group's shares skyrocketed over 43% in pre-market trading.

The $450 million investment from the Department of War will be disbursed with an initial $200 million upon closing, followed by additional installments. Elmet Group noted that over $165 million of this funding is earmarked for operations in Maine, Michigan, and Ohio, where facilities handle the manufacturing and processing of tungsten, molybdenum, and other advanced materials and components. The investment will also back Elmet Group's mining and processing initiatives in the US, Australia, and Spain. Furthermore, Elmet Group is establishing Elmet Refining & Trading, a new division tasked with coordinating raw material procurement, processing, and delivery across its network. Under the deal, the Department of War will receive redeemable preferred shares, warrants representing up to 19.9% of Elmet Group's common stock post-closing, and the right to appoint one independent director and one non-voting board observer.

In parallel, Elmet Technologies has secured an indefinite-delivery/indefinite-quantity contract from the Defense Logistics Agency, with a ceiling of $2 billion and a guaranteed funding commitment of $150 million. The contract covers tungsten ore, concentrates, and sodium tungstate, intended for the DLA Strategic Materials division to support rebuilding the National Defense Stockpile. The base ordering period spans five years through August 30, 2031, with an option to extend up to August 30, 2033. Elmet Group stated it won't deliver materials to the stockpile until sufficient additional supply is secured through mining investments, off-take agreements, and processing capacity expansions, with deliveries expected to phase in as new capacity comes online.

Also on Monday, Elmet Group, along with Blue Moon Metals and EQ Resources, unveiled binding terms for a $150-$175 million investment package targeting the Springer tungsten complex in Nevada, aimed at strengthening the US tungsten supply chain. Under this arrangement, Elmet Group plans to allocate approximately $150 million for Springer-related transactions. The package includes $50 million in tungsten prepayment financing to Blue Moon, a $25 million equity investment in Blue Moon, and $75 million for the Springer APT plant joint venture. An additional $25 million serves as a backstop commitment from Elmet Group and EQ Resources to meet working capital needs for restarting the Springer APT plant. According to Blue Moon's release, $150 million of the Department of War's $450 million investment in Elmet Group has been designated for these Springer transactions, subject to due diligence, regulatory and exchange approvals, and final agreements. Blue Moon's shares jumped nearly 20% in pre-market trading on the news. Once the planned $75 million investment is completed, Elmet Group is expected to hold a 70% stake in the Springer APT facility JV, with Blue Moon at 20% and EQ Resources at 10%, while Springer will operate the plant. Phase one targets annual capacity of 4,000 tonnes. During this phase, Blue Moon retains full ownership and operation of the Springer mine and mill, currently non-operational. Blue Moon aims to restart production by Q4 2027, with the Springer APT plant targeted for a restart in H2 2028. Blue Moon has already secured regulatory approval in August to proceed with construction.

The $450 million investment commitment from the US Department of War, the $2 billion contract from the Defense Logistics Agency, and the investments in the Springer tungsten complex by Elmet Group, Blue Moon, and EQ Resources all underscore Washington's push to fortify its domestic tungsten supply chain. Supply-side constraints are multifaceted and structural. China accounts for roughly 80% of global tungsten output, yet it faces declining ore grades (WO₃ grades in major Jiangxi mines have fallen from 0.40% to below 0.28%) and tighter policies (a 6.5% cut in 2025 mining quotas). In February 2025, China added tungsten and other critical metals to its export control list, substantially reducing available Western supplies of APT and tungsten oxide.

On the demand side, two engines—artificial intelligence and defense—are simultaneously igniting growth. Tungsten hexafluoride is a critical material for TSV processes in HBM and 3D NAND manufacturing, with global demand projected to rise from 9,000 tonnes in 2025 to 15,000 tonnes by 2030, representing a net increase of 3,700 tonnes in tungsten demand. For PCB drill bits, AI server PCB layers have jumped from traditional 12-16 layers to 24-40 layers, significantly increasing drill bit wear, with net tungsten demand growth of 789 tonnes expected from 2025-2030. A more pivotal catalyst is the US defense procurement rule taking effect January 1, 2027, which will prohibit the use of tungsten "covering materials" mined, produced, or processed in "countries of concern"—including China, Russia, North Korea, and Iran—in the defense supply chain, requiring traceability down to the mine level. This effectively forces a structural decoupling of Western defense industries from Chinese tungsten supplies, rendering large volumes of existing global commercial inventory ineligible for US defense applications.

Given the supply-demand imbalance, global tungsten prices have experienced historic surges. The global benchmark APT price has skyrocketed from roughly $300 per metric ton unit five years ago to over $3,000, a nearly tenfold increase. European APT CIF prices currently hold steady in the $2,900-$3,100 range, while domestic Chinese prices hover around ¥595,000 per tonne, with the China-overseas spread widening to approximately $2,000 per metric ton unit.

Beyond these contracts and transactions, other recent developments in Western tungsten supply chain reinforcement include a landmark cooperation agreement between US miner Almonty Industries and the Rwandan government. Under a binding pact disclosed on September 14, Rwanda will grant exploration concessions and processing permits in exchange for a 25% equity stake in Almonty's local subsidiary, with Almonty retaining the remaining 75%. This deal marks a critical step in Almonty's global expansion strategy and represents the first systematic Western penetration into the African continent in building a "de-Chinaized" tungsten supply chain. Rwanda is the only African nation among the world's top ten tungsten producers, giving it outsized strategic value in Western diversification efforts. Vancouver-based Trinity Metals operates Africa's largest tungsten mine, the Nyakabingo mine in Rwanda, and has shipped over 320 tonnes of high-grade concentrate to a Pennsylvania processing facility since signing an off-take agreement last year, supplying 20% of US primary tungsten concentrate consumption. Almonty CEO Lewis Black noted in an interview that the US government facilitated and politically supported the collaboration but provided no direct funding, with products destined for customers in the US, Europe, Japan, and South Korea.