Pentagon backs Elmet with $450 million for tungsten capacity

The US Department of Defense committed $450 million on Sept. 14, 2026 to The Elmet Group to expand domestic tungsten extraction, refining and advanced manufacturing capacity.

The capital targets a critical mineral where China controls roughly 85% of global production and refining. Tungsten provides extreme density and the highest melting point of any metal, making it indispensable for munitions, armor-piercing penetrators and semiconductor tooling.

The financing uses redeemable preferred equity through the Pentagon's Industrial Base Analysis and Sustainment program, coordinated by the newly formed Economic Defense Unit. The transaction includes an initial $200 million drawdown at closing.

The deal awards the US government warrants representing up to 19.9% of the common stock of The Elmet Group. The Pentagon also secures the right to appoint one independent director and one non-voting board observer.

The Elmet Group will direct more than $165 million to modernize existing component facilities in Lewiston, Maine; Coldwater, Michigan; and Euclid, Ohio. These facilities manufacture tungsten, molybdenum and refractory metal components for defense platforms.

Another $150 million will fund upstream supply, reopening the Springer tungsten complex in Pershing County, Nevada. The project creates North America's first independent processing facility for ammonium paratungstate — the central chemical precursor required to produce pure tungsten metal powder.

The Elmet Group will operate the Nevada facility through a joint venture with Canada's Blue Moon Metals and Australia's EQ Resources. Upstream feedstock will come from the restarted open-pit and underground mine assets at the site.

In parallel with the equity agreement, the Defense Logistics Agency awarded subsidiary Elmet Technologies an indefinite-delivery, indefinite-quantity contract ceiling of up to $2 billion. The contract carries a guaranteed funded commitment of $150 million to replenish the National Defense Stockpile.

Tungsten shortages directly threaten more than 100 major defense systems, according to department disclosures. Those programs include the F-35 fighter jet, the Patriot PAC-3 missile, the Precision Strike Missile and Virginia-class attack submarines.

Western defense primes have faced mounting procurement friction since Beijing tightened export controls on strategic minerals in 2024 and 2025. American defense manufacturing rules require compliant domestic or allied sourcing for specialty metals under the Berry Amendment.

The Elmet Group represents the only vertically integrated, domestic producer of tungsten and molybdenum mill products in the United States. Without domestic ammonium paratungstate refining, Western manufacturers have relied on imported intermediates even when sourcing raw concentrates from allied mines.

To coordinate logistics, The Elmet Group will establish a commercial unit called Elmet Refining & Trading. The division will manage concentrate procurement across partner operations in the United States, Australia and Spain.

Mine output from the Springer complex is scheduled to begin in the fourth quarter of 2027, according to company disclosures. Commercial operation of the accompanying ammonium paratungstate chemical plant is scheduled for the second half of 2028.

The public filings do not state the definitive closing date for subsequent capital disbursements beyond the initial $200 million drawdown.

The transaction parties target closing the initial joint venture agreements within 45 days of the Sept. 14 announcement.