Almonty (ASX:AII) Secures Strategic Defence Deal, Strengthens Position in ASX 200 Supply Chain

May 07, 2025 02:09 PM AEST | By Team Kalkine Media

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Almonty (ASX:AII) Secures Strategic Defence Deal, Strengthens Position in ASX 200 Supply Chain — Image source: Shutterstock

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Highlights

Almonty secures a 3-year tungsten oxide supply agreement

Material destined for critical US defence technologies

Agreement features a hard floor price for revenue stability

Almonty Industries (ASX:AII) has entered into a landmark three-year agreement to supply tungsten oxide for exclusive use in US defence applications. The deal, signed with US-based Tungsten Parts Wyoming and Israeli processor Metal Tech, marks a major milestone for Almonty as it aligns its operations with national security needs and high-value industrial demand.

Under the binding offtake agreement, Tungsten Parts Wyoming has committed to purchasing a minimum of 40 metric tons of tungsten oxide per month. This material will be sourced from Almonty's Panasqueira mine in Portugal and, in the future, from the under-construction Sangdong tungsten mine in South Korea. Metal Tech will process the oxide into metal powder either in Israel or the United States before it is integrated into advanced US defence systems.

The tungsten oxide will be used in applications such as missile, drone, and ordnance systems. Its unique properties, including its ability to change colour in response to electrical stimuli, also make it suitable for electrochromic camouflage technology—an emerging innovation in defence hardware.

This agreement not only reinforces Almonty's strategic role in the global tungsten supply chain but also provides a predictable and stable revenue stream. The contract includes a hard floor price, offering financial certainty regardless of market fluctuations. Initial deliveries will begin once Almonty commences production of commercially saleable quantities of tungsten oxide.

Almonty CEO Lewis Black highlighted the significance of the deal, stating that it supports the company's broader objective of aligning production with strategic national interests. The agreement also ensures long-term demand tied to critical defence programs, enhancing Almonty's role as a reliable upstream supplier for the US and its allies.

The news adds weight to Almonty’s position among emerging ASX dividend stocks, given its steady income potential from long-term contracts. This type of agreement supports the value proposition that dividend-focused investors often look for in the ASX200 ecosystem.

As global geopolitical tensions underscore the importance of securing critical minerals, this agreement could bolster investor confidence in Almonty's future growth and resilience, potentially enhancing its relevance within the ASX 200 landscape.

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