Pentagon Funds Elmet, Ucore in Critical Minerals Push

The US Department of War announced twin commitments for American critical mineral processors on Monday (September 14), injecting US$450 million into tungsten manufacturer The Elmet Group (NASDAQ:ELMT) and expanding grant funding for rare-earth developer Ucore Rare Metals (TSXV:UCU,OTCQX:UURAF).

Under the larger of the two deals, the Department of War's newly formed Economic Defense Unit will take redeemable preferred equity and warrants for up to 19.9 percent of Elmet’s common stock.

Maine-based Elmet will deploy more than US$165 million across its plants in Lewiston, Maine; Coldwater, Michigan; and Euclid, Ohio. These facilities produce tungsten components for key defense programs, including Patriot, Javelin, AEGIS, Trident II, and THAAD missiles, F-35 fighter jets, and Virginia and Columbia-class submarines.

Elmet will allocate another US$150 million to form a majority-owned joint venture with Blue Moon Metals and Australia’s EQ Resources to restart ammonium paratungstate conversion at the Springer mine in Nevada.

The agreement provides an initial US$200 million drawdown at closing, while granting the Pentagon one independent board seat and one non-voting observer seat.

Alongside the equity transaction, Elmet subsidiary Elmet Technologies secured a separate contract from the Defense Logistics Agency valued at up to US$2 billion to supply the National Defense Stockpile.

The agreement guarantees US$150 million in funding to deliver tungsten ores, concentrates, and sodium tungstate through August 2031, with an extension option to 2033.

“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 CEO and Chairman Peter V. Anania said in a recent press release.

Concurrently, the Department of War awarded a US$4.6 million contract modification to Halifax-based Ucore Rare Metals, lifting total Pentagon grant funding for its RapidSX rare-earth separation project to US$27 million.

The funds will support process development for samarium and gadolinium (light rare earths) at Ucore’s planned Louisiana Strategic Metals Complex in Alexandria. Both elements were identified by the US Geological Survey as high-risk minerals following export controls enacted by Beijing in April 2025.

Samarium is required for high-temperature magnets in defense hardware, while gadolinium is used in nuclear reactor control rods.

The funding arrives as Defense Federal Acquisition Regulation Supplement rules take effect on January 1, 2027, which bans defense procurement of magnets refined or separated in covered countries including China.

“We are seeing heightened interest from Washington in the role Ucore can play in securing critical rare earth supplies,” Ucore Chairman and CEO Pat Ryan said. “The dots are connecting around a clear national need: the ability to separate the materials that U.S. defense and industrial supply chains depend on.”

Ucore shares are currently trading for C$2.49 on the TSXV as of 10:55 a.m. ET, while Elmet Group shares are moving at US$18.89.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.