Almonty Industries has secured a binding offtake agreement to supply tungsten oxide exclusively for U.S. defense applications, guaranteeing steady demand and pricing for the next three years.
- Binding offtake agreement with U.S. defense contractor Tungsten Parts Wyoming
- Minimum supply of 40 metric tons of tungsten oxide per month
- Exclusive use for U.S. missile, drone, and ordnance systems
- Hard floor pricing with no cap on upside for three years
- Processing partnership with Metal Tech in Israel and U.S.
Strategic Supply Agreement Secures Almonty’s Role in Defense
Almonty Industries Inc., a global tungsten concentrate producer, has taken a significant step in cementing its position within the critical minerals supply chain for national security. The company announced a binding offtake agreement with Tungsten Parts Wyoming (TPW), a U.S.-based defense contractor, alongside Metal Tech (MT), a tungsten processor operating in Israel and the United States. This deal commits TPW to purchase at least 40 metric tons of tungsten oxide monthly, exclusively for U.S. defense applications.
A Win for Predictability and Strategic Alignment
The agreement not only guarantees a steady revenue stream for Almonty but also introduces a hard floor price mechanism that protects against downside risks while allowing for unlimited upside potential. This pricing structure provides commercial certainty in a market often subject to volatility. The initial term spans three years with automatic annual renewals, underscoring a long-term partnership aligned with U.S. defense priorities.
Lewis Black, Almonty’s CEO, highlighted the strategic importance of this deal, emphasizing the company’s commitment to supplying tungsten oxide for high-value defense uses such as missiles, drones, and ordnance systems. This positions Almonty as a key upstream supplier in a supply chain critical to the U.S. and its allies, reinforcing the company’s role beyond mere commodity production to a strategic national security partner.
Operational and Market Implications
Deliveries will commence once Almonty reaches commercially saleable production levels of tungsten oxide, a milestone that will be closely watched by investors and industry observers. The processing of tungsten oxide into metal powder will be handled by Metal Tech, ensuring the material meets the stringent requirements of U.S. defense manufacturing programs. This cross-border collaboration between Canada, the U.S., and Israel reflects the global nature of critical minerals supply chains.
Almonty’s existing operations include the Panasqueira mine in Portugal and the under-construction Sangdong mine in South Korea, one of the world’s largest tungsten deposits outside China. The company also has development projects in Spain, positioning it well to meet growing demand for conflict-free tungsten supplies amid geopolitical tensions and supply chain security concerns.
Looking Ahead
While the agreement secures a substantial portion of Almonty’s near-term production, the company faces the challenge of ramping up output to meet contractual volumes. Market participants will be keen to monitor production timelines and any potential risks that could delay deliveries or impact pricing. Nonetheless, this deal marks a pivotal moment for Almonty, signaling its emergence as a trusted supplier in a strategically vital sector.
Bottom Line?
Almonty’s new defense-focused tungsten deal sets the stage for growth but hinges on timely production ramp-up.
Questions in the middle?
- When will Almonty achieve commercial-scale production to begin deliveries?
- How will global tungsten price fluctuations affect the hard floor pricing terms?
- What are the risks of early termination or supply disruptions under the agreement?