Portland-based Elmet to get $450M to boost US supply of tungsten

The Portland-based Elmet Group (NASDAQ: ELMT) said it has received a $450 million commitment from the federal government to expand domestic tungsten manufacturing and secure long-term access to critical minerals. Tungsten is valued for its ability to withstand extreme heat, pressure and wear, making it essential to a wide range of advanced industrial applications in sectors including aerospace, energy and medical. An initial $200 million drawdown at closing will be followed by additional drawdowns. Elmet shares were trading 32% higher in Monday morning trading, giving the stock a market value of around $692.9 million. U.S. facilities Elmet said it plans to invest more than $165 million of the total in its manufacturing facilities located in Lewiston; Coldwater, Mich., and Euclid, Ohio. The plan is to expand production capacity, increase tungsten output and modernize infrastructure. The plants manufacture and process tungsten, molybdenum and other advanced materials and components. “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,” said Peter Anania, Elmet’s CEO and chair. The commitment was made by the U.S. Department of Defense. Terms call for the department to receive redeemable preferred equity and warrants representing up to 19.9% of Elmet’s common stock after the transaction. The department also has the right to appoint one independent director and one non-voting board observer to Elmet’s board. Advisors on the deal included Goldman Sachs & Co. LLC, Cantor Fitzgerald & Co., Akin Gump Strauss Hauer & Feld LLP and Ellenoff Grossman & Schole LLP. Nevada mine In a related deal, Elmet said it anticipates investing another $150 million from the commitment into a tungsten mine in Imlay, Nev. That investment is part of a joint agreement, announced last week, between Elmet and Toronto, Ontario-based metals supplier Blue Moon Metals Inc. (NASDAQ: BMM) and Australian tungsten supplier EQ Resources Ltd. (ASX: EQR) to redevelop Blue Moon’s Springer Tungsten Complex. Springer historically was one of the largest tungsten mines in the U.S. and could be back in production by late 2027, according to a separate news release. That deal includes an additional $25 million to be set aside by Elmet and EQ Resources for contingencies if needed. Overall supply chain Anania said the broader $450 million commitment is “a significant step toward establishing a secure, vertically integrated tungsten supply chain and creating a more resilient allied platform, from mine to finished component, for the defense and industrial markets that depend on this strategic material." In addition to U.S. mining and processing operations, the money will go toward Elmet’s facilities in Australia and Spain. In relation to the transaction, Elmet established Elmet Refining & Trading, a new division responsible for coordinating sourcing, processing and material delivery across the company’s global network. Tungsten stockpile Separately, Elmet Technologies, a subsidiary of Elmet, was awarded an indefinite delivery/indefinite quantity contract by the Defense Logistics Agency to deliver tungsten ores and other materials into the national defense stockpile. The contract has a guaranteed funded commitment of $150 million and a ceiling value of $2 billion. Elmet said it doesn’t intend to begin delivering material into the stockpile until sufficient supply becomes available through its mining investments, offtake agreements and processing capacity expansions. The contract includes a five-year base ordering period through Aug. 30, 2031, with a two-year extension option through Aug. 30, 2033.