US Funds $450M Expansion of Defense Manufacturing Base
A critical materials supplier has secured a landmark $450M investment from a new defense economic unit, signaling a fresh government strategy to accelerate industrial production and secure supply chains.
Akin Gump advised The Elmet Group, a U.S. critical materials supplier, in securing a $450 million investment from the U.S. Department of War. The transaction is described as a pioneer deal under the department's newly established Economic Defense Unit, which was created to accelerate domestic defense production. Separately, an Elmet subsidiary was awarded an indefinite delivery/indefinite quantity contract with a ceiling of $2 billion to help rebuild the U.S. National Defense Stockpile's tungsten supply. As a condition, Elmet adopted a compliance plan to prevent 'restricted entities' from acquiring a significant stake. Sophisticated counsel should see this as a template for a new, well-funded government strategy to onshore critical supply chains. The creation of the dedicated unit suggests a more proactive government role in private-sector industrial capacity. Clients in the defense, manufacturing, and technology sectors should monitor this unit's activities for funding opportunities and be prepared for novel compliance obligations, like the ownership restrictions seen here.