The Pentagon has announced a $450 million investment in The Elmet Group, the only US-owned fully integrated producer of tungsten and molybdenum, to expand domestic production and reduce American dependence on China, which controls an estimated 85 per cent of global tungsten supply. The move, announced on 14 September 2026, is aimed at securing materials critical to the manufacture of missiles, fighter aircraft and submarines.

Why Tungsten Matters for US Defence

Tungsten is prized for its exceptional hardness, density and resistance to extreme heat and wear — properties that make it indispensable across military platforms. The Pentagon identifies its uses in missiles, munitions, aerospace propulsion systems, naval vessels and electronics.

Elmet currently supports more than 100 military programmes, including the F-35 fighter jet, the Patriot PAC-3 air defence system, the Trident D5 ballistic missile, and Virginia- and Columbia-class submarines. This investment is designed to ensure those supply lines remain insulated from geopolitical disruption.

The Ammonium Paratungstate Chokepoint

A central focus of the investment is ammonium paratungstate (APT), a key intermediate compound in tungsten processing. The Pentagon said the funding will establish the only independent APT production facility in North America, plugging what it described as a critical vulnerability in the US industrial base.

George K. Kollitides II, director of the Pentagon's Economic Defense Unit, said the unit was 'created to identify critical industrial chokepoints before adversaries can exploit them and before they become battlefield risk.' He added that the investment would protect a domestic processing capability essential to sustaining military production.

What the Investment Structure Looks Like

Elmet confirmed the $450 million commitment, with an initial $200 million drawdown at closing, followed by further tranches. In return, the Department of Defense will receive preferred equity and warrants representing up to 19.9 per cent of Elmet's common stock on a post-transaction basis. The department will also be entitled to appoint an independent director and a non-voting board observer.

The company said it plans to invest more than $165 million in its manufacturing operations across Maine, Michigan and Ohio, with capacity expansions and facility modernisation targeted at both defence and industrial customers.

Jobs and Economic Impact

The Pentagon projects job creation in Coldwater, Michigan, and Lewiston, Maine, along with the preservation of manufacturing roles in Euclid, Ohio, and increased demand for mining jobs in Nevada. Separately, the department estimated the investment would support approximately 1,200 downstream jobs across manufacturing, engineering and logistics networks that serve major defence suppliers — though these are projected benefits, not positions already created.

Mike Cadenazzi, assistant secretary for industrial base policy, said the move 'reflects the Department's commitment to rebuilding critical industrial capacity in the United States,' adding that 'expanding domestic tungsten processing will strengthen supply chain resilience, support high-quality manufacturing jobs, and reinforce the production base behind essential defense systems.'

Broader Context: Decoupling from Chinese Critical Minerals

The Elmet investment is the latest in a series of US measures to reduce reliance on Chinese-controlled critical mineral supply chains. This comes amid an intensifying strategic competition between Washington and Beijing, with rare earths and critical materials emerging as a key theatre. China has previously signalled its willingness to restrict exports of such materials in response to US tariffs and technology controls. With tungsten so deeply embedded in advanced weapons systems, supply disruption could, in theory, constrain US military production capacity — a vulnerability Washington is clearly moving to close.