America's Tungsten Problem

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The significance of certain materials, and their extraction from the earth and refinement, is a factor that underpins a lot of the downstream developments in defense technology.

The distribution of certain elements across the globe is critical to the fate of all nations, and goes a long way to explaining the strategic picture of how states, and economies, compete.

It’s with that in mind that this issue focuses on one particularly important element.

Tungsten.

For about 60 years, a factory in Lewiston, Maine, made one thing above all: the tungsten filaments inside lightbulbs. Philips owned it from 1929 until the early 2000s.

Then LEDs arrived, and the lightbulb business faded. The plant didn't.

Under new owners it turned the same metal toward missiles, submarines, and fighter jets.

On Sept. 14, the Pentagon committed $450 million to its parent company, The Elmet Group.

It's a clear dual-use story: a civilian market that shrank, a military need that grew, and a metal that’s essential to both.

Tungsten has the highest melting point of any metal, and it's nearly as dense as gold. That combination makes it very hard to replace.

Most of it goes into ordinary industry. The U.S. Geological Survey estimates that about 60% of American use ends up in cemented carbide: the hard tips on cutting tools, drill bits and mining equipment.

Defense takes a smaller share by volume, but it's the share that worries Washington. Tungsten turns up in armor-piercing rounds, missile components, and naval systems. 

The Pentagon says Elmet alone supports more than 100 programs, from the F-35 and Patriot interceptors to Virginia- and Columbia-class submarines.

The military and the machine shop stand in the same line for a limited supply.

Tungsten moves through three broad stages: mining the ore, refining it into an intermediate chemical, and turning that into powder, alloys, and finished parts.

The middle stage is the one to watch. Ore concentrate is converted into ammonium paratungstate (APT), a white powder that's the standard feedstock for almost everything made from tungsten.

China dominates both of the first two steps. According to S&P Global, it holds about 79% of world mining capacity and about 85% of APT refining. The U.S. relies on imports for more than half of what it uses.

In February 2025, Beijing put tungsten products, including APT, under export licensing. Prices followed. Rotterdam APT began 2025 at around $331 per metric ton unit, according to the USGS. In May 2026, Fastmarkets' benchmark hit an all-time high of about $3,140.

The lesson is that ownership of the material itself is not enough. Extraction and refinement must be a sovereign capability to address this dramatic price surge.

The $450 million comes through the Pentagon's Industrial Base Analysis and Sustainment program, led by its new Economic Defense Unit. It's structured as redeemable preferred equity, with $200 million drawn at closing.

In return, the department gets warrants for up to 19.9% of Elmet's stock, the right to appoint an independent director and a board observer.

That's an unusually direct stake for the Pentagon to take in a supplier, though it follows a similar move into rare-earths producer MP Materials last year.

Separately, the Defense Logistics Agency gave Elmet a contract worth up to $2 billion to help refill the National Defense Stockpile. Elmet says it won't start delivering until new supply comes online, so stockpiling doesn't starve American factories.

More than $165 million goes to Elmet's existing plants in Maine, Michigan, and Ohio. About $150 million goes to Nevada.

That's where the APT bet sits. The Springer complex, near Imlay, has an old mine, a mill, and an APT circuit. Blue Moon Metals bought it in February for about $18.5 million.

Elmet will own and run 70% of a joint venture to restart APT production there, with Blue Moon and Australia's EQ Resources as partners.

The targets: the mine and mill restart in late 2027, and APT production follows in the second half of 2028, with a planned first phase of about 4,000 tons a year. The Pentagon says it'll be the only independent APT facility in North America.

The urgency comes from a date. From Jan. 1, 2027, defense acquisition rules bar contractors from delivering tungsten powder or heavy alloy that was mined, refined, separated, melted, or produced in China, Russia, Iran, or North Korea.

The upstream rule dates to 2021 and has already been pushed back once. Now it's close, and compliant supply isn't fully there.

Washington is pulling other levers too. In August, the Commerce Department restricted exports of tungsten scrap, which S&P estimates makes up around 60% of what refiners outside China process.

And the stockpile it wants to refill has shrunk. CSIS's Gracelin Baskaran told Congress in March that the National Defense Stockpile fell from roughly $24 billion in 1990 to under $2 billion in 2024, adjusted for inflation.

The timing doesn't line up. The procurement ban starts in January 2027. Springer's APT plant isn't due until the second half of 2028. Expect waivers in between.

"Independent" is doing a lot of work. North America already has an APT producer: Global Tungsten & Powders in Towanda, Pennsylvania.

It's owned by Austria's Plansee Group, and it's locked up much of the new non-Chinese ore. Almonty's Sangdong mine in South Korea has contracted about 90% of its first-phase output to GTP for 21 years.

The resource is old data. Springer's tonnage comes from historical work, not a current verified estimate. Blue Moon plans new drilling.

There's no price floor. Western tungsten mines lost money for decades at Chinese prices. If Beijing eases its controls and prices fall, a plant planned at today's prices could struggle. Unlike the MP Materials deal, this one doesn't guarantee a minimum price.

Three things make this deal worth watching.

First, it targets the middle of the chain. Most mineral headlines are about mines. This one funds the refining step, which is where China's real leverage sits.

Second, it exposes the dual-use squeeze. Defense buyers will pay almost anything to meet a deadline. Toolmakers won't. European manufacturers already say Chinese competitors with cheaper tungsten are undercutting them on finished tools. Securing supply for missiles without pricing out industry is the hard part.

Third, allies are doing the same. In August, Britain's National Wealth Fund put up to £71 million into restarting the Hemerdon mine near Plymouth, with an exclusive window to negotiate for up to half its output. The pattern is the same: governments taking stakes where markets wouldn't.

None of that is proven yet. Announcing capacity is the easy part.

Tungsten doesn’t make for eye-catching headlines in the the way drones or fighter jets do.

But, if Springer is turning out APT in 2028, the U.S. will have rebuilt a vital supply chain link it had let snap.

If it isn't, expect deadlines to keep slipping and prices to keep climbing.

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