U.S. Bets Big on Domestic Tungsten Supply Chain! Elmet (ELMT.US) Secures $450 Million Investment Commitment from Department of War + $2 Billion Defense Contract, Stock Soars in Response

Elmet Group (ELMT.US), a manufacturer of critical materials and high-power microwave products for the aerospace and defense sectors, announced on Monday that it has secured a $450 million investment commitment from the U.S. Department of War to expand tungsten mining, processing, and manufacturing capacity. In addition, the company's wholly-owned subsidiary Elmet Technologies has been awarded a contract worth up to $2 billion from the U.S. Defense Logistics Agency to supply tungsten materials for the U.S. National Defense Stockpile. Buoyed by this news, Elmet Group's U.S. shares surged more than 43% in pre-market trading on Monday as of press time. **$450 Million Investment Commitment + $2 Billion Defense Contract** Elmet Group stated that of the U.S. Department of War's $450 million investment, $200 million will be disbursed first upon closing of the transaction, with additional disbursements to follow. The company added that it expects more than $165 million of that amount to be allocated to operations in Maine, Michigan, and Ohio, where its facilities are responsible for the manufacturing and processing of tungsten, molybdenum, and other advanced materials and components. The investment will also support Elmet Group's mining and processing investments in the United States, Australia, and Spain. Additionally, Elmet Group is establishing Elmet Refining & Trading, a new division responsible for coordinating raw material procurement, processing, and material delivery across the company's network. Under the terms of the arrangement, the U.S. Department of War will receive redeemable preferred shares in Elmet Group, warrants equivalent to up to 19.9% of Elmet Group's common stock following the closing of the transaction, and the right to appoint one independent director and one non-voting board observer. Separately, Elmet Technologies has been awarded an indefinite-delivery/indefinite-quantity (IDIQ) contract from the U.S. Defense Logistics Agency. The contract has a ceiling of up to $2 billion and includes $150 million in guaranteed funding commitments. The contract covers tungsten ore, tungsten concentrate, and sodium tungstate, to be supplied to the DLA Strategic Materials division, aimed at supporting the rebuilding of the U.S. National Defense Stockpile. The contract has a base ordering period of five years, running through August 30, 2031, with an option to extend for two additional years, up to a maximum term through August 30, 2033. Elmet Group stated that it does not intend to deliver the relevant materials to the National Defense Stockpile until sufficient additional supply is secured through mining investments, offtake agreements, and processing capacity expansion. Deliveries are expected to be phased in as new capacity comes online. **Springer Tungsten Mine Complex Investment Plan! Up to $175 Million** Also on Monday, Elmet Group, along with Blue Moon Metals (BMM.US) and EQ Resources, announced binding terms for a proposed investment of $150 million to $175 million in the Springer tungsten mine complex located in Nevada, aimed at strengthening the U.S. tungsten supply chain. Under the arrangement, Elmet Group plans to allocate approximately $150 million for the Springer-related transactions. The plan also includes $50 million in tungsten prepayment financing to Blue Moon, a $25 million investment in Blue Moon, and a $75 million investment in the Springer ammonium paratungstate (APT) plant joint venture. An additional $25 million is a standby funding commitment made by Elmet Group and EQ Resources to meet the funding requirements related to the resumption of production at the Springer APT plant. Blue Moon's announcement stated that of the $450 million investment from the U.S. Department of War to Elmet Group, $150 million has been designated for these Springer-related transactions. The transactions remain subject to due diligence, regulatory and exchange approvals, and the execution of definitive agreements. Buoyed by this news, Blue Moon's U.S. shares rose nearly 20% in pre-market trading on Monday as of press time. It is understood that upon completion of the planned $75 million investment, Elmet Group is expected to hold a 70% stake in the Springer APT plant joint venture, with Blue Moon holding 20% and EQ Resources holding 10%, with Springer responsible for operating the plant. The Phase 1 target capacity is 4,000 tonnes per year. During this phase, Blue Moon will continue to 100% own and operate the Springer mine and concentrator. Currently, neither the mine nor the concentrator is in production. Blue Moon aims to resume production in the fourth quarter of 2027, while the Springer APT plant targets a restart in the second half of 2028. Blue Moon received regulatory approval in August allowing the Springer project to proceed with construction. **U.S. Seeks to Strengthen Domestic Tungsten Supply Chain** The U.S. Department of War's $450 million investment commitment to Elmet Group, the up-to-$2 billion contract from the U.S. Defense Logistics Agency, and the investment by Elmet Group, Blue Moon, and EQ Resources in the Springer tungsten mine complex all indicate that the United States is seeking to strengthen its domestic tungsten supply chain. The supply side faces multiple structural constraints. China accounts for approximately 80% of global tungsten ore production, but it is also facing dual pressures of declining resource grades (WO grades at major mining areas in Jiangxi have dropped from 0.40% to below 0.28%) and tightening policies (the 2025 mining quota was cut by 6.5%). In February 2025, China added tungsten and several other critical metals to its export control list, directly causing a significant decline in the available supply of APT and tungsten oxide in Western markets. On the demand side, two major enginesartificial intelligence (AI) and defenseare simultaneously igniting demand. Tungsten hexafluoride (WF) is an essential material for the TSV process in HBM and 3D NAND manufacturing, with global demand projected to grow from 9,000 tonnes in 2025 to 15,000 tonnes in 2030, corresponding to a net increase of 3,700 tonnes in tungsten demand. In the PCB drill bit segment, AI server PCB layer counts have jumped from the traditional 12-16 layers to 24-40 layers, significantly increasing drill bit wear, with a projected net increase of 789 tonnes in tungsten demand from 2025 to 2030. The more critical catalyst is the new U.S. defense procurement rule taking effect on January 1, 2027. At that point, the U.S. defense supply chain will be prohibited from using tungsten "covered materials" mined, produced, or processed in "countries of concern" (including China, Russia, North Korea, and Iran), with traceability required down to the mine level. This means that a large portion of existing global commercial inventory will not be able to meet U.S. defense application requirements, forcing a structural decoupling of the Western defense industrial system from Chinese tungsten supply. Amid the supply-demand imbalance, global tungsten prices have experienced a historic surge. The global benchmark APT price has soared from approximately $300 per tonne unit five years ago to over $3,000 per tonne unit, a roughly tenfold increase. European APT CIF prices are currently stable in the range of $2,900 to $3,100 per tonne unit, while Chinese domestic prices are approximately 595,000 yuan per tonne, with the price gap between Chinese and foreign markets having widened to about $2,000 per tonne. It is worth noting that in addition to the aforementioned contracts and transactions, the latest news regarding the U.S. and the West seeking to strengthen the tungsten supply chain includes U.S. mining company Almonty Industries (ALM.US) reaching a landmark cooperation agreement with the Rwandan government. Under the binding agreement disclosed on September 14, Rwanda will provide exploration concessions and processing licenses in exchange for a 25% equity stake in Almonty's local subsidiary, with Almonty retaining the remaining 75% ownership. This deal is not only a key step in Almonty's global expansion strategy but also marks the first time the West has systematically extended its reach into the African continent in the process of building a "de-China-fied" tungsten supply chain. Rwanda is the only African country among the world's top ten tungsten producers, giving it strategic value far beyond its size in Western efforts to diversify supply chains. Currently, Vancouver-based Trinity Metals operates the largest tungsten mine on the African continentthe Nyakabingo minein Rwanda. Since reaching an offtake agreement last year, the company has shipped more than 320 tonnes of high-grade concentrate to a processing plant in Pennsylvania, supplying 20% of U.S. primary tungsten concentrate consumption. Almonty CEO Lewis Black stated in an interview that the U.S. government helped facilitate this cooperation and provided political support but did not provide direct funding; the products will be sold to customers in the United States, Europe, Japan, and South Korea.