Almonty Industries (ASX:AII) has entered into a binding offtake agreement with US-based defence contractor Tungsten Parts Wyoming and tungsten processor Metal Tech, to supply tungsten oxide.
Under the deal, Tungsten Parts will purchase a minimum of 40 tonnes of tungsten oxide per month from Almonty. Meanwhile, Metal Tech will act as the designated processor and will convert the tungsten oxide into tungsten metal powder in Israel or the US.
All of the material supplied under the deal will exclusively be used in US defence applications. These materials include missile, drone, and ordnance systems.
Once initial production is in commercially saleable quantities, deliveries will begin, subject to a hard floor price comparable with in-place existing floor prices.
The agreement has a three year term beginning from the date of first delivery, with automotive renewals thereafter.
CEO Lewis Black says this agreement represents a milestone for Almonty, securing predictable revenue through a defined hard floor price and long-term demand tied directly to the US defence programs.
“Beyond commercial certainty, the agreement ensures that our tungsten oxide will serve a strategic, high-value end-use — reinforcing Almonty’s position as the key upstream supplier to the defence supply chain of the US and its allies,” Black says.
“It reflects our broader commitment to aligning production with national security priorities while delivering sustainable value to my fellow shareholders and is another customer of Almonty who is happy to commit to our hard floor pricing terms as a condition of supply.”
The deal further positions Almonty as a strategic supplier of critical raw materials for national security and underscores the integrating of an upstream supply with allied defence manufacturing capabilities.
Tungsten, known for its density and high melting point, is most commonly used in armor-piercing missiles in the defence industry. The metal is also used in a wide range of weapons, according to Tungsten Metals Group.
The use of tungsten alloy military items dates back to World War One and two, when they were widely deployed in the military arena.
Write to Aaliyah Rogan at Mining.com.au
Images: Almonty
