The Elmet Group has secured a $450 million committed investment from the U.S. Department of War to expand domestic tungsten manufacturing and strengthen access to critical raw materials, while separately receiving a Defense Logistics Agency contract with a ceiling value of up to $2 billion to help rebuild the U.S. National Defense Stockpile.
The investment represents a major expansion of Elmet’s vertically integrated tungsten strategy following the company’s IPO earlier this year and recent expansion into Europe.
Elmet plans to use the funding to increase U.S. tungsten manufacturing capacity, secure long-term raw-material supplies and invest in mining and processing infrastructure in the United States and allied countries.
More than $165 million is expected to be invested in Elmet facilities in Lewiston, Maine; Coldwater, Michigan; and Euclid, Ohio. Those operations manufacture and process tungsten, molybdenum and other advanced materials and components used across defense, aerospace and industrial applications.
The company plans to increase production capacity, boost tungsten output and modernize infrastructure supporting programs including Patriot, Phalanx, JDAM, F-35 and rocket systems.
Elmet will also allocate approximately $150 million to the Springer Tungsten Complex in Imlay, Nevada.
The company plans to form and operate a majority-owned joint venture with Blue Moon Metals and Australia’s EQ Resources to restart and expand ammonium paratungstate conversion capacity at the facility.
Ammonium paratungstate, or APT, is an important intermediate material used in the processing of tungsten into higher-value products.
The broader strategy extends internationally.
Elmet expects to support mining, processing and commercial partnerships across the U.S., Australia and Spain as it works to create a more diversified Western tungsten supply chain.
The company also plans to secure additional long-term feedstock through investments and offtake agreements.
To coordinate those activities, Elmet is establishing a new business called Elmet Refining & Trading.
ERT will oversee sourcing, refining and material delivery across the company’s growing network, giving Elmet a more integrated structure connecting mining and feedstock procurement with processing and finished-material manufacturing.
Tungsten is valued for its resistance to extreme heat, pressure and wear and is used across defense, aerospace, energy, semiconductor, medical and industrial applications.
Elmet said it supplies major U.S. defense programs including Patriot, Javelin, AEGIS, Trident II and THAAD, along with Virginia- and Columbia-class submarines.
The company describes itself as the only U.S.-owned vertically integrated tungsten producer serving the full breadth of critical end markets.
Under the Department of War investment agreement, Elmet will initially draw $200 million at closing, with additional capital to be provided through subsequent drawdowns.
In return, the Department will receive redeemable preferred equity and warrants representing up to 19.9% of Elmet’s common stock on a post-transaction basis.
The Department will also receive the right to appoint one independent director to Elmet’s board and one non-voting board observer.
Separately, subsidiary Elmet Technologies has received an indefinite delivery/indefinite quantity contract from the Defense Logistics Agency to support replenishment of the National Defense Stockpile.
The contract carries a ceiling value of up to $2 billion and includes a guaranteed funded commitment of $150 million.
It covers tungsten ores, concentrates and sodium tungstate supplied to DLA Strategic Materials.
Elmet said it does not plan to begin delivering material into the stockpile until sufficient incremental supply becomes available from the mining investments, processing expansions and offtake agreements associated with its new strategy.
The approach is intended to prevent government stockpile purchases from reducing material available to existing U.S. manufacturers.
Potential sources will include Blue Moon Metals’ Springer Mine in Nevada, EQ Resources’ Mt. Carbine Mine in Australia and the Barruecopardo Mine in Spain.
The DLA agreement includes a five-year base ordering period through August 30, 2031, along with an option extending the arrangement through August 30, 2033.
Goldman Sachs and Cantor Fitzgerald are serving as financial advisors to Elmet. Akin Gump Strauss Hauer & Feld and Ellenoff Grossman & Schole are legal advisors, while Joele Frank is serving as strategic communications advisor.
KEY QUOTES:
“This investment represents an important step toward securing a resilient supply of tungsten, a material that is critical to America’s defense, industrial, and economic future.”
“Following our successful IPO earlier this year and recent expansion into Europe, we believe this investment will further accelerate our growth and reinforces The Elmet Group’s position as a leading Western supplier of tungsten products and other advanced materials and components.”
Peter V. Anania, CEO and Chairman of The Elmet Group
“The Department is committed to empowering the American warfighter and workforce. We are proud to invest in Elmet Technologies to bring tungsten-processing capacity home to the United States and strengthen the industrial might that powers and protects our way of life.”
George K. Kollitides II, Director of the Economic Defense Unit
