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The Defense Department announced this month a $450 million investment in The Elmet Group to strengthen the U.S. supply chain for tungsten, a critical mineral used for manufacturing military weapons ranging from bullets to missiles.
The investment comes as a federal procurement rule barring tungsten mined, refined, or processed in China, Russia, Iran and North Korea from defense applications nears its Jan. 1 deadline.
In the announcement, the Defense Department said it chose to invest in Elmet because it is “the only U.S.-owned, fully integrated producer of tungsten and molybdenum materials and components.”
“This investment reflects the Department’s commitment to rebuilding critical industrial capacity in the United States,” said Michael Cadenazzi, the Defense Department’s assistant secretary for industrial base policy.
He added that it will “strengthen supply chain resilience, support high-quality manufacturing jobs, and reinforce the production base behind essential defense systems.”
Chris Berry, a critical-minerals analyst, explained on his podcast that China dominates the global tungsten supply chain, while the U.S. has not mined tungsten since 2015.
Although ongoing conflicts in Ukraine and Iran have increased pressure on tungsten demand, Berry argued that its rising price is “due almost exclusively to policy choices in Beijing and Washington.”
“The free flow of tungsten material is for now a thing of the past,” he said, adding that those policies have created “two distinct markets” and driven a rapid increase in prices.
According to government data, China controls about 85% of the world’s tungsten supply and 40% of its molybdenum, a similar material that is often mined in the same areas.
While tungsten is primarily used to make tools for manufacturing, Berry said the metal is also used for fabricating semiconductors for AI data centers and he called it “a must-have” for the defense industry because of its unique properties.
The Defense Department announced this month a $450 million investment in The Elmet Group to strengthen the U.S.