The Elmet Group has secured two significant contracts with the Department of Defense (DoD) valued at $2.45 billion, aiming to fortify the domestic tungsten metal supply chain. These agreements, announced during a business update call, are part of a strategic move to enhance the U.S. National Defense Stockpile and support over 100 defense programs.
What Happened
Elmet Technologies, a subsidiary of the Elmet Group, received a five-year, $2 billion indefinite delivery/indefinite quantity (IDIQ) contract from the Defense Logistics Agency (DLA) on September 11, 2026. This contract is designed to support the U.S. National Defense Stockpile, ensuring a steady supply of tungsten, a critical mineral used in various defense systems including the F-35 fighter jet and missile systems such as the Patriot Advanced Capability and Precision Strike.
In addition to the IDIQ contract, the DoD has committed to purchasing $450 million in Class A preferred stock through its Economic Defense Unit program. The proceeds from this transaction will be directed towards expanding and upgrading Elmet's tungsten mining, processing, and manufacturing capabilities. This strategic investment underscores the critical role tungsten plays in national defense and the importance of securing a reliable domestic supply chain.
These agreements coincide with a new rule from the Commerce Department's Bureau of Industry and Security, effective from August 27, 2026, to August 27, 2027, which restricts the export of black mass and tungsten waste without a license. This regulation further emphasizes the need to secure domestic sources of tungsten to meet defense and industrial demands.
What This Means for Your Business
For businesses involved in the defense supply chain, these contracts represent significant opportunities and challenges. The guaranteed $150 million minimum commitment within the IDIQ contract ensures steady demand for tungsten concentrates and sodium tungstate, providing a stable revenue stream for suppliers and manufacturers involved in the tungsten supply chain.
Moreover, the federal investment in Elmet's infrastructure indicates potential growth in U.S. manufacturing capacity, potentially lowering costs and increasing the availability of tungsten products domestically. This could enhance competitive positioning for U.S. operators in the defense industry by reducing reliance on foreign tungsten sources.
Compliance officers and procurement directors should note the implications of the new export restrictions. Ensuring adherence to these regulations will be crucial to avoid disruptions in supply and potential legal repercussions. Businesses should also consider how these developments might influence their own procurement strategies and supply chain resilience.
What US Operators Should Watch
Key dates and timelines are critical for decision-makers to monitor. The IDIQ contract spans five years, presenting a long-term opportunity for engagement with the DLA. The new export rule regarding tungsten waste is effective until August 2027, requiring ongoing compliance.
Additionally, the planned upgrades at the Springer Tungsten Complex in Nevada, expected to be funded by the DoD's investment, should be closely watched. These upgrades could significantly impact the availability and cost of tungsten, affecting procurement strategies.
Operators should also be aware of potential bidding opportunities related to the expansion of tungsten processing and manufacturing capabilities as Elmet executes its modernization plans.
Source: https://www.manufacturingdive.com/news/dod-war-elmet-group-tungsten-supply-chain-dla-economic-defense-unit/830331/ Read the original story ->
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