Elmet Group Awarded $2 Billion US Defense Contract to Bolster Tungsten Stockpile

Elmet Group announced on Monday that one of its units has been awarded a contract worth approximately $2 billion by the U.S. Defense Logistics Agency (DLA) to help rebuild the National Defense Stockpile. The award is a key part of a broader U.S. government effort to strengthen the domestic supply chain for tungsten, a critical mineral.

Contract Details

The agreement, reported by Reuters, includes a guaranteed funded commitment of $150 million. Under the terms, Elmet will supply tungsten ores, concentrates, and sodium tungstate to DLA Strategic Materials.

Elmet stated it will not begin deliveries until it secures additional supplies through new mining investments and offtake agreements. This strategy is intended to avoid disrupting the market and ensure a stable supply for existing U.S. manufacturers that rely on the material.

Strategic Importance and Context

Tungsten is a critical mineral essential for the aerospace and defense industries. Its extreme hardness and high melting point make it ideal for components that must withstand intense heat, stress, and wear.

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The contract comes as Washington seeks to secure alternative sources of tungsten and reduce its reliance on China and Russia. The global supply of the mineral has been tightening due to Chinese export restrictions and the fact that there are no active tungsten mines in the United States, heightening supply chain concerns for the Pentagon.

Separate Funding to Boost US Production

In a separate development, Elmet said it has secured $450 million in funding from the U.S. Department of War to accelerate the expansion of its domestic manufacturing capabilities.

The investment includes an initial drawdown of $200 million. In return, the U.S. government will receive redeemable preferred equity and warrants representing up to 19.9% of Elmet’s common stock. The government also gains the right to appoint one independent director and one non-voting observer to the company's board.

Elmet plans to invest over $165 million of its own capital into facilities in Maine, Michigan, and Ohio. The funds will be used to expand production capacity, increase tungsten output, and modernize infrastructure supporting key U.S. industrial programs.