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Almonty Industries (ASX: AII) has signed a binding offtake agreement with US-based defense contractor Tungsten Parts Wyoming (TPW) and Israeli processor Metal Tech.
TPW has agreed to purchase a minimum of 40 metric tons of tungsten oxide per month from Almonty, which is currently mining, processing and shipping tungsten concentrate from its Panasqueira mine in Portugal and building the Sangdong tungsten mine in South Korea.
The tungsten oxide supplied under the agreement will be used exclusively in US defense applications including missile, drone and ordnance systems.
Camouflage application
Tungsten’s ability to change colour in response to electrical stimuli makes it useful for developing electrochromic device technology, where it can rapidly adjust camouflage patterns.
Metal Tech will convert the tungsten oxide into metal powder in either Israel or the US, with all processed material intended solely for TPW’s US defense production programs.
The agreement has an initial term of three years from the date of first delivery, with automatic annual renewals thereafter.
Deliveries of the material will commence upon Almonty’s initial production of tungsten oxide in commercially saleable quantities and will be subject to a hard floor price comparable with existing pricing policies.
Predictable revenue stream
Almonty chief executive officer Lewis Black said the binding offtake agreement represented a significant milestone for the company, securing both predictable revenue through a defined hard floor price and long-term demand tied directly to US defense 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 defense supply chain of the US and its allies,” Mr Black said.
“It reflects our broader commitment to aligning production with national security priorities while delivering sustainable value […] and is another customer of Almonty who is happy to commit to our hard floor pricing terms as a condition of supply.”
