Amaero Ltd has secured a substantial A$9 million saving on its Argon recycling plant, ordered a fourth atomizer to boost U.S. powder production, and remains on track with its A$72 million capital investment program.
- A$9 million capital saving on Argon recycling plant reduces total cost to ~A$6 million
- 4th EIGA Premium Atomizer ordered, commissioning scheduled for June 2027
- ~80% reduction in recurring Argon expenses improves unit economics
- On-budget and on-schedule A$72 million three-year capital investment program
- US$22.8 million EXIM Bank loan drawdowns aligned with commissioning milestones
Significant Cost Savings on Argon Recycling Plant
Amaero Ltd (ASX – 3DA) has announced a major revision to its Argon recycling plant project, slashing the total capital cost from an estimated A$15 million to approximately A$6 million. This A$9 million saving represents a roughly 60% reduction from initial projections and accelerates the timeline for cost benefits by about 12 months. The plant is now expected to be commissioned by the end of calendar year 2026, with operating expense savings anticipated to begin in the first quarter of 2027.
The Argon recycling system is a critical component in Amaero’s manufacturing process, as Argon gas is a high-value input for producing titanium and refractory alloy powders. The new system is projected to reduce recurring Argon consumption expenses by around 80%, materially improving the company’s unit economics and competitive positioning. With a payback period estimated between two and two and a half years, the investment promises durable margin improvements relative to industry peers.
Capacity Expansion with Fourth EIGA Premium Atomizer
In line with its growth strategy, Amaero has executed a purchase contract for its fourth EIGA Premium Atomizer, with commissioning scheduled for June 2027. This addition will further expand the company’s U.S. powder production capacity across titanium and refractory alloy programs. The EIGA atomizers are recognized for their advanced technology, including a non-contact crucible design that reduces contamination risk and delivers a significantly higher yield of spherical powder suitable for laser powder bed fusion (LPBF) additive manufacturing.
Notably, the atomizers also reduce Argon consumption by approximately 50% compared to prior-generation systems, complementing the cost savings from the Argon recycling plant. Combined with Amaero’s subsidized electricity contract at a competitive rate, these efficiencies reinforce the company’s position as a low-cost domestic producer.
On Track with A$72 Million Capital Investment Program
Amaero remains on budget and on schedule with its three-year capital investment plan totaling approximately A$72 million, with around A$57 million already invested as of the end of June 2026. Key milestones achieved include substantial facility improvements, commissioning of PM-HIP manufacturing systems, and securing long-lead equipment for atomizers #3 and #4. These investments underpin the company’s transition from development to scaled production and commercialization of advanced manufacturing components.
The company’s financing strategy is also progressing smoothly, with a US$22.8 million loan facility from the Export-Import Bank of the United States. Drawdowns are timed to align with commissioning milestones, with approximately US$15 million expected to be drawn by the end of 2025 and the balance by mid-2026. This approach minimizes idle capital and preserves cash reserves during the scaling phase.
Strong Balance Sheet and Strategic Partnerships
Amaero’s balance sheet remains robust, with cash reserves of approximately A$53 million and tangible assets valued at around A$60 million excluding cash. The company’s leadership in titanium and refractory alloy powder production, combined with its PM-HIP near-net-shape manufacturing capabilities, positions it as a key supplier to defense, space, aviation, and medical industries.
Strategic engagement with major maritime and defense stakeholders, including Bechtel Plant Machinery, Naval Nuclear Laboratory, NAVSEA, General Dynamics Electric Boat, and others, underscores Amaero’s role in addressing critical supply chain challenges. Chairman and CEO Hank Holland emphasized the company’s commitment to sovereign manufacturing security and disciplined capital allocation as it executes its growth plan from its Tennessee base.
Bottom Line?
Amaero’s cost savings and capacity expansions set the stage for stronger margins and market leadership as it scales production.
Questions in the middle?
- How will the Argon recycling cost savings translate into revenue and profit growth?
- What are the risks to the commissioning timeline for the new atomizer and Argon plant?
- How will Amaero’s strategic partnerships influence future contract wins and market share?