US DoW backs Elmet Group with $450m to rebuild tungsten supply chain

The Elmet Group (NASDAQ: ELMT), a Maine-headquartered critical-materials producer, has secured a $450 million committed investment from the United States Department of War, alongside a separate contract worth up to $2 billion to replenish the National Defense Stockpile. The twin agreements mark the most significant single federal commitment to domestic tungsten supply in recent memory, and a clear signal that Washington is treating critical-mineral self-sufficiency as a defence-industrial priority on a par with semiconductor reshoring.

Tungsten sits at the convergence of multiple strategic verticals. Its ability to withstand extreme heat and pressure makes it irreplaceable in penetrators, rocket nozzles, armour-piercing munitions, and high-performance aerospace components. Elmet's existing customer base spans Patriot, Javelin, AEGIS, THAAD, Trident II, and the F-35 programme, as well as Virginia- and Columbia-class submarines. That list is less a commercial portfolio than a map of America's highest-priority deterrence systems.

A vertically integrated bet on Western supply

The $450 million will be deployed in stages, beginning with an initial $200 million drawdown at closing. More than $165 million is earmarked for Elmet's existing US facilities in Lewiston (Maine), Coldwater (Michigan), and Euclid (Ohio). A further $150 million will fund a majority-owned joint venture with Blue Moon Metals and Australia's EQ Resources to restart ammonium paratungstate (APT) conversion capacity at the Springer Tungsten Complex in Imlay, Nevada. APT is the intermediate processing stage that converts mined ore into usable tungsten compounds, and domestic APT capacity has been a critical gap in the US supply chain.

To coordinate material flows across this expanding network, Elmet is launching a new division, Elmet Refining and Trading, which will manage sourcing, refining, and delivery across operations in the US, Australia, and Spain. The DoW will receive redeemable preferred equity and warrants representing up to 19.9% of common stock, plus board representation rights. Goldman Sachs and Cantor Fitzgerald are advising on the transaction.

The investment comes from the DoW's newly established Economic Defense Unit, created earlier this year to accelerate US defence-industrial base production. "We are proud to invest in Elmet Technologies to bring tungsten-processing capacity home to the United States," said EDU Director George K. Kollitides II.

Convergence: critical minerals at the intersection of defence, energy, and capital markets

The Elmet deal sits squarely within a broader structural shift in how Western governments are treating critical-mineral supply chains. China controls an estimated 80% of global tungsten processing capacity, a dominance that mirrors its earlier leverage in rare earths. Having watched rare-earth dependencies crystallise into a geopolitical vulnerability, Washington, Canberra, and Brussels are now moving to pre-empt a similar dynamic in refractory metals.

For cross-sector investors, the convergence angle is multi-layered. Defence procurement budgets are increasingly being deployed as industrial policy instruments, effectively de-risking private capital in sectors where commercial returns alone would not justify the capital intensity. Elmet's recent IPO means public-market investors now have direct exposure to a company that straddles defence procurement, mining, advanced manufacturing, and energy-adjacent materials. That is a rare cross-sector profile in a market where most listed defence primes are too large and diversified to offer pure-play critical-mineral exposure.

The stockpile contract, with a ceiling of $2 billion and a base period running to August 2031, also introduces a long-duration offtake structure that underpins project finance for the Nevada and Australian mining expansions. That model, combining sovereign equity investment with guaranteed offtake, is becoming a template for allied-nation critical-mineral strategies from the Inflation Reduction Act's domestic-content incentives to Australia's Critical Minerals Facility. Elmet's multi-geography supply network, spanning Nevada, Maine, Spain, and Queensland, is structurally designed to qualify under friend-shoring procurement criteria that several NATO members are now codifying into defence acquisition rules. The second-order effect worth watching is whether rival Western tungsten projects in Portugal and Canada accelerate their own funding timelines in response to Elmet's government-backed consolidation move.