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The US Department of War (DoW) has agreed to invest $450 million in The Elmet Group (ELMT), with $150 million earmarked for Blue Moon Metals’ (TSXV: MOON; Nasdaq: BMM) Springer tungsten complex in Nevada, as Washington pushes to rebuild a domestic supply chain for the strategic metal.
Under a binding agreement with Elmet and Australia’s EQ Resources (ASX: EQR), Blue Moon would receive a $50-million tungsten concentrate prepayment facility and a $25-million equity investment, while Elmet would put another $75 million into a joint venture to restart Springer’s ammonium paratungstate, (APT) plant. Elmet and EQ have set aside a further $25 million if needed for the plant.
ELMT already supplies tungsten to US defense programs, including Patriot and Javelin missile systems, Trident II missiles, and Virginia- and Columbia-class submarines, as well as to aerospace, energy and medical applications.
“This is a major validation event,” Haywood Securities analyst Pierre Vaillancourt said in a note Monday, maintaining his buy rating and $15 target for Blue Moon. Haywood said the financing substantially de-risks Springer while allowing Blue Moon to retain full ownership of the mine and mill.
Scotiabank analyst Eric Winmill also called the transaction positive and maintained a sector outperform rating and $14 target. He said the combination of strategic offtake, downstream participation and government support reduces Blue Moon’s financing and market-access risk while leaving it with the mine and mill and a 20% interest in the APT operation.
Critical minerals rush
The funding comes from the DoW’s newly established Economic Defense Unit, which coordinates defence-related economic initiatives aimed at accelerating production across the US defence industrial base.
It is also part of a broader US government push to develop domestic sources of critical minerals and reduce reliance on China, which dominates global tungsten production and processing.
“The Department is committed to empowering the American warfighter and workforce,” George K. Kollitides II, director of the Economic Defense Unit, said. “Strengthening the industrial might that powers and protects our way of life.”
The DoW will initially invest $200 million at closing, followed by additional drawdowns. DoW will also receive a redeemable preferred equity, representing up to 19.9% of ELMT’s common stock, and the right to appoint one independent director to the company’s board and one non-voting board observer.
Not just one project
More than $165 million of the investment will go towards ELMT’s US manufacturing facilities in Maine, Michigan and Ohio, where tungsten and other advanced materials are produced, helping to expand production capacity and output and modernize critical defense infrastructure.
Blue Moon’s Springer mine and mill are expected to restart production by the end of 2027, and the APT facility will begin operations by mid-2028, the company said.
“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,” Elmet Group CEO Peter V. Anania said.
ELMT will also launch Elmet Refining and Trading (ERT), a new division to coordinate sourcing, refining, and delivery activities across a diversified supply chain. ELMT aims to establish a reliable long-term access to tungsten for the US, Australia, Spain and other allied countries to further develop a supply chain for critical materials independent of China.
ERT will oversee the $150 million investment in a network of key partnerships and deals, including the Mt. Carbine Mine in Australia and the Barruecopardo Mine in Spain.
$2B contract
Separately, Elmet Technologies, a subsidiary of ELMT, has also secured a US government contract worth up to $2 billion to strengthen the long-term resilience of the country’s tungsten supply chain.
The indefinite-delivery, indefinite-quantity contract with the Defense Logistics Agency has a ceiling value of up to $2 billion, including a guaranteed funded commitment of $150 million. It covers the supply of tungsten ores, concentrates and sodium tungstate to the agency’s Strategic Materials.
ELMT does not plan to deliver material into the National Defense Stockpile until sufficient incremental supply becomes available through mining investments, offtake agreements and processing capacity expansions.
The contract includes a five-year base ordering period through August 30, 2031, with a two-year extension option through August 30, 2033, providing a long-term framework to strengthen sources of tungsten.
