NioCorp Shares Surge on Reported Lockheed Martin Scandium Supply Talks

Shares of NioCorp Developments (NASDAQ:NB) surged as much as 17% on Tuesday following a Reuters report that defense contractor Lockheed Martin is in negotiations to purchase critical minerals from the company. The talks are part of a broader push by U.S. defense firms to secure domestic supply chains and reduce reliance on China.

Details of the Potential Agreement

According to sources familiar with the discussions cited by Reuters, Lockheed Martin is negotiating with NioCorp for a supply of scandium. The two parties have reportedly signed a preliminary deal for NioCorp to provide 15 metric tons of scandium per year.

This volume is significant, representing approximately a quarter of the estimated 60 metric tons of global annual demand, according to the U.S. Geological Survey. The scandium would be supplied from NioCorp's mine project in Nebraska, which is slated to open by 2028 with a planned annual production capacity of 100 metric tons. The agreement would still need to be finalized, though the companies have an existing relationship through a Pentagon-funded research program.

Strategic Context and Market Impact

The potential deal aligns with a recent U.S. government initiative to strengthen domestic mineral supply chains. Last month, an executive order was signed making it more difficult for defense contractors to obtain waivers for purchasing minerals from foreign suppliers like China, the report noted.

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For investors, a finalized agreement with a customer of Lockheed's stature would represent a major de-risking event for NioCorp's Nebraska project, securing a foundational buyer for its future output. Scandium is a rare earth element used to create lightweight, corrosion-resistant alloys for high-performance applications, including aircraft components.

Broader Industry Push

The move by Lockheed, the world's largest defense contractor, signals a tangible step in the U.S. effort to onshore its critical mineral supply. The Reuters report also stated that Lockheed is in separate talks with Teck Resources and 5N Plus for germanium, another material used in military equipment like infrared sensors.

Despite this push, U.S. producers face challenges, including historically lower prices from established Chinese suppliers and the significant investment required to build out domestic mining and processing capacity.