Almonty's Strategic Tungsten Pact: Securing U.S. Defense Supply Chains Amid Geopolitical Tensions

The United States’ quest to insulate its defense supply chains from Chinese dominance has found a critical ally in Almonty Industries, a Canadian miner of tungsten, a metal indispensable for advanced weaponry. With China controlling 80% of global tungsten production, the U.S. military’s reliance on this resource poses a vulnerability that Almonty’s new binding offtake agreement aims to neutralize.

A Pact Rooted in Strategic Necessity

The agreement, inked with Tungsten Parts Wyoming, Inc. (TPW) and Metal Tech (MT), guarantees a minimum monthly supply of 40 metric tons of tungsten oxide (WO₃) to TPW, a U.S. defense contractor. This translates to 480 metric tons annually, fulfilling 15–20% of the Pentagon’s defense-related tungsten needs. The material will be processed by MT into tungsten metal powder—a critical component for hypersonic missiles, armor-piercing rounds, and drone counterweights—exclusively for U.S. military systems.

The partnership’s terms are designed to insulate Almonty from market volatility. A hard floor price mechanism ensures predictable revenue, while upside potential lets Almonty benefit from rising prices tied to geopolitical or supply-demand shifts. reveal a market prone to swings of over 35%, making this structure a safeguard for both parties.

National Security Meets Commercial Pragmatism

For the U.S., the deal is a win in its "friend-shoring" strategy. By sourcing tungsten from Portugal, South Korea, or Spain—Almonty’s operational hubs—the agreement reduces reliance on China, which has weaponized its mineral dominance in past trade disputes. Processing the ore into metal in allied nations (the U.S. or Israel via MT) adds geographic redundancy, shielding supply chains from regional disruptions.

Almonty, meanwhile, secures a $13–$15 million annual revenue floor, critical for funding its flagship project: the Sangdong mine in South Korea, which aims to produce 5,000 metric tons of tungsten annually by 2026. The agreement’s three-year term, with automatic renewals, aligns with Pentagon procurement cycles, offering long-term stability.

reflects investor optimism: shares have risen 40% since the deal’s announcement, signaling confidence in its strategic and financial upside.

Risks and Realities

Despite the promise, challenges remain. Permitting delays at Sangdong or operational hiccups could strain supply timelines. Tungsten’s price volatility, though mitigated by the floor, isn’t fully eliminated. Yet the pact’s structure—coupled with U.S. government backing (e.g., the 2022 National Defense Authorization Act, which allocated $120M to secure critical minerals)—positions Almonty as an indispensable partner.

Conclusion: A Foundation for Resilience

Almonty’s offtake agreement is a landmark in defense supply chain resilience. By locking in a non-Chinese tungsten source for U.S. military systems, it addresses a critical vulnerability while providing Almonty with a stable revenue stream and a springboard for expansion. With the Sangdong mine’s potential to meet 10% of global non-Chinese tungsten demand by 2026, and a pricing model insulated from market swings, the company is well-positioned to capitalize on a $3 billion global tungsten market expected to grow at 4% annually.

For investors, the deal underscores Almonty’s shift from a commodity miner to a strategic supplier of high-purity tungsten—a niche where geopolitical tailwinds and defense budgets will amplify its value. In a world where supply chains are battlefields, Almonty has just secured a pivotal advantage.