Largo (TSX:LGO) has been awarded a five-year contract to supply up to 2,876 tonnes of ‘high-purity’ vanadium pentoxide to the US Department of Defence (DOD).
The indefinite delivery, indefinite quality contract supports the US National Defence Stockpile and has a maximum value of US$125 million ($181 million).
The agreement establishes fixed pricing per pound of vanadium pentoxide at a premium above current benchmark price indexes in 2026, escalating 10% annually thereafter.
Largo will supply the material from its Maracás Menchen Mine and chemical complex in Bahia, Brazil.
Executive Chairman Alberto Arias says the award represents a “major milestone” after a lengthy review process with the DOD.
“We are proud to become part of the supply chain to the United States Government for high-purity vanadium and to support… efforts to strengthen and secure diversified and allied supply chains for this critical material used in aerospace, defence, energy storage, specialty alloys, and other key industrial applications,” Arias says.
With China and Russia currently producing approximately 80% to 85% of world vanadium supply, co-CEO Daniel Tellechea notes the structure of the contract reflects the value the US Government places on securing reliable sources of vanadium pentoxide.
“This contract should help improve Largo’s vanadium price realisations and help offset the headwinds of depressed vanadium prices outside the US as well as price inflation in raw materials and energy costs recently caused by logistics disruptions in the Middle East,” Tellechea says.
Largo produced 9,150 tonnes of vanadium pentoxide equivalent in 2025 and has guided for 10,500 to 12,000 tonnes of production in 2026.
Largo is a vanadium producer sourcing from its Maracas Menchen Mine in Brazil and holding interests in US utility-scale energy storage solutions. It also fully owns the Northern Dancer Tungsten-Molybdenum property in Canada’s Yukon Territory.
Write to Paula Fabe at Mining.com.au
Images: Largo
