Lockheed Martin: Missile Production Set to Rise Significantly
Lockheed Martin is picking up the pace. On September 17, the US defense contractor signed a framework agreement with the US Department of Defense to accelerate production and delivery of the new AIM-260 JATM air-to-air missile. The weapon system is intended for modern fighter jets such as the F-22 and F-35 and is expected to offer greater range and performance than previous systems.
The agreement is intended to pave the way for a multi-year procurement program, which, however, still depends on congressional approval. For Lockheed Martin, this is about more than higher production volumes. The company aims to stabilize its supply chain, reduce production risks, and build additional capacity over the long term.
A second report from the same day illustrates just how much pressure there is. Together with GM Defense, Lockheed has received the first components for the PAC-3 MSE interceptor missile, less than a month after the collaboration began. The partnership is intended to tap into additional industrial capacity and ramp up production of the air defense system more quickly.
This shifts the focus increasingly from the order backlog to industrial implementation. New production lines require machinery, skilled workers, and, above all, materials. High-performance metals and critical raw materials are thus becoming a decisive factor in the expansion of the Western defense industry.
Almonty Industries: Sandvik Secures Tungsten
At Almonty Industries, the expansion of a Western tungsten supply chain is taking further shape. Last week, the company signed a multi-year take-or-pay offtake agreement with Wolfram Bergbau und Hütten, a subsidiary of the Swedish industrial group Sandvik. The agreement calls for the delivery of approximately 1,720 metric tons of contained tungsten trioxide, to be recovered through the reprocessing of existing tailings at the Los Santos mine in Spain. The agreement also includes a conditional one-time payment of USD 3 million for the offtake rights.
Almonty does not need to develop a new mine from scratch for this. The existing tailings piles originate from the former Los Santos operation. The processing plant, idle since 2020, will be brought back online to extract additional tungsten from already mined material. This could quickly turn an existing brownfield site into an additional production asset.
At the same time, Almonty is geographically diversifying its raw material base. Just a few days earlier, a strategic partnership with Rwanda was agreed upon. Almonty holds 75% of the new joint venture, while the Rwandan government holds 25%. Among other things, exploration rights for Shyorongi and a processing license are being contributed. The partnership was formed following mediation by the US State Department and underscores the geopolitical importance of tungsten.
Added to this are the existing operations in Portugal and Sangdong in South Korea. Almonty is increasingly evolving from a single mine operator into a more broadly diversified Western tungsten platform. Following the announcement of a strategic partnership with the Rwandan government, the research firm DA Davidson reaffirmed its “Buy” recommendation for Almonty Industries with a price target of USD 33.
Rheinmetall: Billion-Dollar Boom Requires New Capacity
Rheinmetall is also continuing to invest in its industrial base. On September 17, the company announced a new vibration test facility at its Telford, UK, site. There, complete structures and assemblies weighing up to 40 metric tons can be tested under realistic vibration, shock, and motion conditions. The facility is already being used in the development of the Challenger 3, the British Army’s new main battle tank.
Instead of testing components and systems exclusively through time-consuming field trials, stresses can now be simulated in a controlled manner, thereby shortening development cycles. Especially in light of rising defense budgets, the ability to actually fulfill additional orders is becoming increasingly important for Rheinmetall.
The investment is part of a much larger capacity expansion. The Düsseldorf-based group is currently expanding its production, development, and testing sites in several countries. This is no longer just about ammunition. The portfolio ranges from armoured vehicles and air defense to sensor technology, electronics, and military digitalization.
However, greater production capacity also means higher material requirements. Modern weapons systems require specialty steels, copper, aluminum, and other critical metals. Tungsten plays a key role, particularly in wear-resistant components and certain military applications, due to its high density, hardness, and heat resistance.
Rheinmetall’s expansion exemplifies why the defense boom is increasingly becoming a raw materials issue as well. While factories can be built and production lines expanded, strategic metals cannot be developed at will.
The defense boom is impacting supply chains. Lockheed Martin is ramping up missile production, while Rheinmetall continues to expand its development and manufacturing capacities. As a result, the strategic importance of critical raw materials is increasing. Almonty Industries is broadening its presence in the tungsten market through operations in Sangdong, Portugal, Spain, and its new partnership in Rwanda. The Sandvik contract again shows that Western industrial conglomerates are beginning to secure long-term supplies.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a “Transaction”). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.