U.S. Department of Defense Takes $450M Stake in Elmet, Locking in Domestic Supply Chain After 8x Surge in Tungsten Prices
nashnova research
The U.S. Department of Defense invested $450 million in tungsten manufacturer Elmet Group for a 19.9% preferred-equity stake; Elmet shares surged as much as 55% on the news. This means → after an eightfold spike in tungsten prices, the Pentagon is paying hard cash to pull a critical-mineral supply chain back from China.
Where does the money go — how is the $450 million being spent?
An initial $200 million tranche lands first; the rest follows in stages.
More than $165 million goes into Elmet's plants in Maine, Michigan, and Ohio for tungsten, molybdenum, and advanced-materials processing.
The remaining funds back mining and processing capacity in the U.S., Australia, and Spain. This means → the Pentagon isn't just buying equity — it's pouring money directly into mines and factory floors.
Why tungsten — what's behind the 8× price surge?
China tightened tungsten export controls in early 2025; prices have since risen more than eightfold.
Tungsten is essential for armor-piercing munitions, semiconductor etch components, and industrial cutting tools — in plain terms = warfare, chipmaking, and heavy manufacturing all depend on the same metal.
Defense economic-security chief George K. Kollitides II said tungsten is "critical to protecting American warfighters and maintaining deterrence." This reflects the Pentagon elevating tungsten supply security to the same tier as rare earths.
Beyond the equity stake — what else comes with the deal?
Elmet also secured a roughly $2 billion contract from the Defense Logistics Agency to supply tungsten ore, concentrates, and sodium tungstate — a mid-stage tungsten product — for rebuilding the National Defense Stockpile.
The contract includes $150 million in guaranteed funding, but Elmet pledged not to begin stockpile deliveries until new capacity is online — in plain terms = mine first, build the factories, then fill the warehouse, so existing U.S. producers aren't starved of supply.
New ore sources include the Springer mine in Nevada (Blue Moon Metals), the Mt. Carbine mine in Australia (Eq Resources), and the Barruecopardo mine in Spain.
Is the U.S. betting on just one company?
The same day, mining firm Almonty Industries announced a tungsten-ore procurement deal with Rwanda, brokered with U.S. government help but no direct funding.
Earlier, the Pentagon invested $400 million in rare-earth producer MP Materials and later added USA Rare Earth, Canadian lithium miner Lithium Americas, and mine developer Trilogy Metals.
This means → the Pentagon is placing parallel bets across multiple countries and minerals — building a network, not betting on a single node.
Can this double bet pay off — where is the core risk?
Tungsten prices have recently stabilized, but supply chains typically take years from project launch to first ore.
Escalating Middle East tensions and rising defense-procurement demand mean the demand side will not wait for supply to catch up.
Put simply = the money is spent and the contracts are signed, but whether the mines deliver on time and capacity keeps pace with the twin draw from defense and semiconductors is the make-or-break test for this investment.
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