U.S. Department of Defense to Invest $450M in Domestic Tungsten Production

On September 14, the Department of Defense's Office of the Assistant Secretary of War for Industrial Base Policy and the Economic Defense Unit announced a $450 million redeemable preferred equity investment in The Elmet Group. The investment is being made through the Industrial Base Analysis and Sustainment program and will give the U.S. government a 20% stake in the publicly traded company.

The Department described the investment as redeemable preferred equity. According to Investing.com (cited in the announcement), redeemable preferred equity gives the investor priority over common stockholders for dividends and liquidation and includes a feature that allows or requires redemption (buyback) at a pre-agreed price or after a specified event.

The Elmet Group says it is the last and only fully integrated U.S.-owned producer of pure tungsten and molybdenum. The company completed an initial public offering earlier in 2026. The Department framed the investment as strengthening domestic tungsten capacity and bolstering industrial resilience and military readiness.

George K. Kollitides II, director of the Economic Defense Unit, said: "Tungsten is essential to the systems that protect American warfighters and sustain deterrence, and this investment helps secure a domestic processing capability the United States cannot afford to leave exposed." That statement was included in the Department's release explaining the rationale.

• Ownership and oversight: The government will hold a 20% equity stake through a preferred instrument rather than common stock, providing priority rights tied to dividends and liquidation while preserving a pathway for redemption.
• Industrial base focus: The transaction is part of the Industrial Base Analysis and Sustainment program, which targets strategic materials and production capabilities that support defense systems.
• Supply-chain resilience: The Department framed the move as reducing exposure of critical materials and processing to external supply shocks.

The announcement focuses on the capital injection, ownership percentage, and the strategic rationale. Details that were not included in the release include specific use of proceeds inside Elmet (project timelines, plant expansions, or workforce plans) and the terms surrounding the timing or conditions for redemption of the preferred shares.

Defense has made a significant financial commitment to a U.S. tungsten and molybdenum producer using a redeemable preferred equity instrument and acquiring a 20% stake. The stated aim is to secure domestic processing capacity for materials that feed more than 100 defense programs and to reduce supply-chain risk for critical defense components.