Mentioned:The Elmet Group$450M · Government Support
The Defense Department invested $450 million in The Elmet Group to strengthen U.S. tungsten production ahead of a federal procurement rule barring the metal from China, Russia, Iran and North Korea effective January 1, 2027. Elmet is the only U.S.-owned, fully integrated producer of tungsten and molybdenum materials.
What's happening
- DoD is investing $450 million in Elmet Group, the only U.S.-owned fully integrated tungsten and molybdenum producer, to rebuild domestic supply chain capacity.
- The company will use $165 million to upgrade manufacturing operations in Maine, Michigan and Ohio; $150 million to restart tungsten mining in Imlay, Nevada; and $100 million to establish refining and trading operations.
- The investment precedes a January 1, 2027 federal procurement rule that bars tungsten mined, refined or processed in China, Russia, Iran and North Korea from defense applications.
- Elmet supports more than 100 defense programs including Patriot, Javelin, AEGIS, Trident II, THAAD and Virginia and Columbia-class submarines.
Why it matters
- The U.S. has not mined tungsten domestically since 2015, leaving defense programs dependent on foreign sources as China controls 85 percent of global tungsten supply and 40 percent of molybdenum supply.
- Tungsten has unique physical properties, the highest melting point of any metal, and no good substitute at scale for most defense and industrial applications.
- Integrated mining, refining and processing capacity is essential; according to industry analysis, every dollar mined should be paired with a processing dollar to create functional supply chains.
- The January 2027 sourcing restriction forces rapid domestic buildout, making Elmet's capacity investments critical to avoiding program delays and cost overruns across more than 100 defense initiatives.
Going deeper
- Elmet has signed mining operations agreements with Tungsten West in England and Vietnam-based Masan High-Tech Materials Corporation to support access and international partnerships.
- Tungsten demand is price-inelastic and concentrated in defense, semiconductor manufacturing for AI data centers and industrial tooling applications.
- Ongoing conflicts in Ukraine and Iran have increased tungsten demand pressure, but prices are rising primarily due to policy decisions by Beijing and Washington that have created two distinct global markets.
Financial impact
- Elmet recognizes $450 million in government support funding to balance sheet in Q3 2026, supporting capital expenditures for three separate facility programs completed over multiple years.
- Revenue from 100-plus defense programs will recognize over periods of performance tied to manufacturing capacity ramp-up; timing of revenue recognition depends on project schedules and delivery timelines not disclosed.
- The capital investment directly expands production capacity and reduces reliance on foreign suppliers, improving gross margins on high-value defense contracts by lowering material sourcing costs.
The intrigue
- China's 85 percent control of global tungsten supply and ability to restrict exports gives Beijing strategic leverage over U.S. defense production; the timing of the January 2027 rule suggests the Pentagon anticipated supply risk acceleration.
- Elmet went public earlier in 2026, meaning the company raised capital through public markets before receiving this $450 million government investment, raising questions about valuation and ownership dilution.
The fine print
- The investment amount is $450 million, allocated across three distinct programs: $165 million for manufacturing upgrades, $150 million for mining restart and $100 million for refining operations.
- The January 1, 2027 deadline for the federal procurement rule is a hard constraint on sourcing decisions but does not necessarily restrict imports of raw tungsten ore; refinement and processing location matter for compliance.
Source: Defense News · Sep 30, 2026 · Drafted with Claude, reviewed by Industrial Base Alpha.