Elmet Group shares surged nearly 33% after the U.S. government committed up to $450 million to expand the company’s tungsten supply chain, a financing package that could transform the recently public manufacturer into a much larger supplier of strategically important materials to the U.S. defense industry.
The stock closed Monday at $21.50, up 32.8%, after trading as high as $25.03. Nearly 14 million shares changed hands, compared with fewer than 150,000 in the previous session. Elmet went public in April at $14 a share.
The Pentagon-backed investment is unusually large relative to Elmet itself. The company ended Monday with a market value of roughly $655 million and reported just $66.4 million of second-quarter revenue.
It also comes with an additional commercial opportunity: an Elmet subsidiary has secured a Defense Logistics Agency agreement to supply tungsten materials for the National Defense Stockpile. The contract carries a ceiling of up to $2 billion, although only $150 million is guaranteed during its five-year base period.
Together, the financing and stockpile contract give Elmet capital to expand supply and a potentially large government buyer for that additional production.
They do not guarantee $2.45 billion of revenue or free government funding.
Only $200 million of the Pentagon investment was funded at the initial closing. The remaining $250 million is expected to be made available in later tranches as Elmet progresses through its expansion plans and satisfies government conditions.
In return, the government received redeemable preferred equity, warrants representing up to 19.9% of Elmet’s common stock on a post-transaction basis, and rights to appoint one independent director and one nonvoting board observer.
That structure gives taxpayers economic participation in Elmet’s growth while introducing potential dilution for existing shareholders.
A Small Company Is Getting a Much Larger Capital Base
The scale of the transaction stands out because Elmet was already growing quickly before the Pentagon announcement.
Second-quarter revenue climbed 35.2% from a year earlier to $66.4 million. Adjusted EBITDA increased roughly 58% to $8.9 million, while backlog rose nearly 55% to a record $132 million.
Elmet said about 55% of its revenue growth came from higher underlying demand, with the remainder tied largely to higher tungsten and molybdenum raw-material prices. Aerospace, defense and government customers were among the strongest areas of demand.
The company had $66.1 million of cash at the end of the quarter following its April IPO, which generated approximately $125.5 million of net proceeds.
The first $200 million government investment alone is therefore roughly three times Elmet’s most recent quarterly revenue and three times the cash it held at the end of June.
Management plans to deploy more than $165 million into manufacturing operations in Maine, Michigan and Ohio, increasing capacity for tungsten heavy alloys, powders and other products used in defense and industrial applications.
Another roughly $150 million is expected to support the Springer Tungsten Complex in Nevada. Elmet plans to establish a majority-owned joint venture with Blue Moon Metals and Australia’s EQ Resources to restart mining and build out ammonium paratungstate processing.
Mine and mill production at Springer is currently targeted to resume in the fourth quarter of 2027, while the processing operation is expected to start during the second half of 2028.
Elmet also plans investments and supply agreements tied to tungsten operations in Australia and Spain, creating a broader network of sources outside China.
The company is effectively trying to connect mining, chemical processing and finished-component manufacturing under one supply system.
China’s Tungsten Dominance Is Driving the Investment
That strategy is valuable because tungsten remains one of the mineral markets most concentrated in China.
China accounted for an estimated 82% of global mined tungsten production in 2024, according to the U.S. Geological Survey. The United States was roughly 50% dependent on imports for its tungsten consumption, while China introduced export controls on selected tungsten products in February 2025.
Tungsten’s hardness, density and ability to withstand high temperatures make it difficult to replace in certain weapons and aerospace applications.
The Pentagon says Elmet supplies more than 100 defense programs, including the F-35 fighter, Patriot PAC-3 missile, Trident D5 ballistic missile and Virginia- and Columbia-class submarines.
The government investment is also expected to establish what the Pentagon describes as the only independent ammonium paratungstate processing facility in North America. Ammonium paratungstate, or APT, is an intermediate product used to convert mined tungsten into material that can eventually become metal powders and finished components.
That processing step has become one of the more important vulnerabilities in the Western tungsten supply chain.
Elmet’s strategy is therefore not simply to mine more material. It is attempting to control more of the chain between the mine and the final defense component.
The $2 Billion Contract Needs Perspective
The Defense Logistics Agency agreement adds a major potential revenue opportunity, but the ceiling figure requires restraint.
The contract allows purchases of tungsten ores, concentrates and sodium tungstate worth as much as $2 billion. The guaranteed minimum is $150 million.
Elmet also does not expect deliveries to begin immediately.
Management said it intends to supply the National Defense Stockpile only after additional production becomes available from new mining investments, processing facilities and supply agreements. The company wants to avoid diverting existing material away from current U.S. industrial customers.
That makes the contract closely tied to execution of the capital program.
If Springer takes longer than expected to restart, processing capacity runs behind schedule or allied suppliers fail to deliver sufficient material, the timing of stockpile revenue could move with it.
The $2 billion ceiling should therefore be viewed as potential demand capacity rather than booked revenue.
The Government Is Becoming a Strategic Shareholder
The financing also changes Elmet’s ownership structure.
Unlike a conventional defense contract, the Pentagon is receiving securities alongside the capital it provides. The warrants could eventually give the government a sizable equity position, while preferred shares rank ahead of common shareholders in certain circumstances.
That introduces dilution risk, but the trade-off is access to capital on a scale Elmet would have struggled to raise independently without substantially altering its balance sheet or issuing large amounts of common stock.
The government also gains greater influence through its board appointment rights.
For Elmet, the arrangement places its growth plans directly inside Washington’s broader effort to reduce dependence on China for critical minerals. It resembles the increasingly active role the federal government has taken in financing strategically important domestic mineral supply chains rather than relying solely on traditional procurement contracts.
The stock’s 33% jump reflects how significant that opportunity is for a company of Elmet’s size.
But the next phase will be measured less by announcements than by construction and production.
Elmet now has to expand three U.S. manufacturing sites, secure enough non-Chinese tungsten feedstock, restart the Springer operation, bring a new North American processing facility online and eventually turn the DLA agreement into actual purchase orders.
The first $200 million has arrived. The much larger test is whether that capital can turn Elmet from a roughly $265 million annualized-revenue manufacturer into the vertically integrated tungsten platform the Pentagon is paying it to become.