Lockheed F-35 Labor Contract Secures Fort Worth Production Continuity

F-35

Lockheed F-35 labor contract has been ratified by unionized employees at the company’s Fort Worth, Texas, assembly site, removing the immediate risk of labor disruption at one of the most important US fighter aircraft production facilities.

Lockheed F-35 labor contract will run for five years through June 2031 and includes annual wage increases, additional vacation benefits and a $6,000 ratification bonus. Workers represented by the International Association and Aerospace Workers approved the agreement on 14 June.

Lockheed F-35 labor contract is strategically important for the aerospace materials supply chain because the F-35 is highly titanium intensive. Each aircraft contains an estimated 5,900lb of titanium, equivalent to roughly 20% of total aircraft weight.

The agreement therefore provides greater production certainty not only for Lockheed Martin, but also for titanium mills, forgers, machinists and component suppliers tied to the F-35 programme.

Labor Stability Protects F-35 Production Schedules

The previous labor agreement was due to expire at midnight on 14 June, creating the possibility of disruption if negotiations failed.

Lockheed and the union reached a tentative agreement on 11 June before workers formally ratified the contract three days later.

The agreement also covers employees at Edwards Air Force Base in California and Patuxent River Naval Air Station in Maryland, extending labor stability beyond the Fort Worth assembly operation.

For Lockheed, avoiding a work stoppage is particularly important because fighter aircraft production depends on highly specialised labour and tightly coordinated supplier schedules.

A prolonged disruption at final assembly could quickly affect upstream suppliers because aerospace components are produced according to programme-specific delivery schedules and qualification requirements.

The five-year agreement gives Lockheed greater visibility over workforce costs and production continuity through the end of the decade.

Titanium Supply Chain Benefits From Production Continuity

The F-35 remains one of the most titanium-intensive major aircraft programmes. Titanium is used extensively because of its high strength-to-weight ratio, corrosion resistance and compatibility with composite structures.

At around 5,900lb of titanium per aircraft, changes in F-35 production volumes can have a meaningful impact on aerospace-grade titanium demand.

The material requirement extends beyond sponge and ingot. F-35 production supports demand for titanium plate, billet, forgings, castings, machined components and scrap recycling across a highly qualified supply chain.

Labor stability at Fort Worth therefore reduces one potential source of demand volatility for titanium suppliers.

The effect also extends to other aerospace materials, including nickel-based superalloys, aluminium and specialty steels used across engines, structures and landing systems.

For suppliers, predictable aircraft production is especially valuable because aerospace capacity cannot be adjusted quickly. Qualification requirements, long lead times and specialised equipment make sudden production changes difficult to absorb.

The Metalnomist Commentary

The labor agreement removes a near-term operational risk from one of the world’s most titanium-intensive defense programmes. For the titanium supply chain, stable F-35 production provides valuable demand visibility through a period of rising defense manufacturing requirements.

USAR Rare Earth Separation Plant Starts Operations in Colorado

US rare earths

USAR rare earth separation capacity has taken another step forward after USA Rare Earth commissioned its hydrometallurgical demonstration plant in Wheat Ridge, Colorado. The facility will produce separated heavy rare earth oxides, with initial output scheduled for the third quarter of 2026.

USAR rare earth separation will target strategically important materials including dysprosium, terbium and yttrium. These elements are critical to high-performance magnets, aerospace, defence, electronics and other advanced manufacturing applications.

USAR rare earth separation is especially significant because heavy rare earth processing remains one of the most concentrated stages of the global supply chain. Developing domestic separation capability could reduce US dependence on overseas processing.

The Wheat Ridge facility will also test multiple feedstock routes, allowing USAR to process mined material alongside recycled magnet waste.

Three Feedstocks Test a Flexible Heavy Rare Earth Supply Model

The Wheat Ridge plant is designed to process three flowsheets in parallel. These include ore from USAR's Round Top project in Texas, material from the Serra Verde Pela Ema mine in Brazil and magnet swarf from manufacturing operations.

This diversified feedstock strategy is strategically important. A separation facility capable of handling both primary resources and recycled material can reduce dependence on a single mine or supply route.

Round Top provides a potential domestic US feedstock source, while Serra Verde gives USAR exposure to Brazilian heavy rare earth resources.

Magnet swarf adds a recycling pathway. Manufacturing waste can contain valuable neodymium, dysprosium, terbium and other rare earths that can be returned to the supply chain instead of being discarded.

The combination creates the basis for a more circular rare earth system connecting mining, recycling and downstream separation.

The plant's automation and real-time process monitoring should also generate technical data required for commercial scale-up. In rare earth processing, consistent purity, recovery and process control are essential before technology can move into large-scale production.

Federal Funding Supports USAR's Integrated Rare Earth Strategy

USAR has secured access to as much as $1.6bn in US government funding, providing significant financial support for its wider rare earth strategy.

The company is attempting to build an integrated supply chain extending beyond mining into separation, metals, alloys and permanent magnets.

Its planned acquisition of Serra Verde would further strengthen that structure by adding an operating Brazilian heavy rare earth resource. The transaction remains subject to regulatory scrutiny in Brazil.

Heavy rare earths are especially important because dysprosium and terbium are used to improve the temperature resistance of NdFeB permanent magnets.

These magnets are critical to electric motors, defence systems, robotics, aerospace and other high-performance applications.

For the US, securing access to ore alone is therefore insufficient. Separation capacity is essential because mixed rare earth feedstock must be converted into individual high-purity oxides before downstream metallisation and magnet production.

The Colorado demonstration plant gives USAR an opportunity to prove that capability across several feedstock types before moving toward larger-scale production.

The Metalnomist Commentary

USAR's Colorado plant targets one of the hardest bottlenecks in the non-China rare earth chain: heavy rare earth separation. Its ability to process both mined feedstock and magnet waste could become strategically valuable if the technology proves scalable.

Amazon Corning Fiber Optics Deal Expands US AI Infrastructure Supply

Corning

Amazon Corning fiber optics investment will expand US production of optical fiber, cable and connectivity systems used in data centers. Amazon plans multibillion-dollar investment under a multi-year agreement with Corning.

Amazon Corning fiber optics partnership reflects the rapid infrastructure buildout behind artificial intelligence and cloud computing. Faster data transfer between servers, accelerators and data centers is increasing demand for high-performance optical networks.

Amazon Corning fiber optics expansion also has a direct critical minerals angle. Fiber optics are the largest end-use market for germanium in the US, linking AI infrastructure growth with demand for a strategically important minor metal.

Corning expects the partnership to create about 1,000 advanced manufacturing jobs in North Carolina. The companies also plan to expand technician training to support the larger manufacturing base.

AI Data Centers Drive Optical Fiber Capacity Growth

Amazon will use Corning's optical fiber, cable and connectivity products across its data center network. The agreement gives Corning a major anchor customer as it expands domestic manufacturing.

AI computing requires enormous volumes of data to move quickly between processors, memory and networking systems. As computing clusters grow larger, optical connectivity becomes increasingly important for maintaining high bandwidth and low latency.

This means AI investment is spreading beyond semiconductor chips into photonics, fiber networks, power equipment, cooling systems and grid infrastructure.

Corning expects to increase fiber production by more than 50%. It also plans three new manufacturing facilities in North Carolina and Texas through a separate partnership with Nvidia.

The combination of Amazon and Nvidia demand gives Corning greater visibility for future capacity utilization. It also supports additional investment in US optical communications manufacturing.

Germanium Demand Gains New AI Infrastructure Exposure

The expansion is important for germanium because the metal is widely used in fiber optic manufacturing. Germanium compounds help control the refractive properties of optical glass, supporting efficient transmission of high-speed data.

Rapid fiber deployment therefore creates another demand channel for the minor metal. Individual fiber products use relatively small quantities, but large-scale data center construction can materially increase aggregate consumption.

Supply security is becoming more important because germanium production and processing remain concentrated. Greater AI-related demand could increase competition for refined and high-purity material.

For technology companies, optical connectivity is becoming as critical as access to processors and electricity. For materials suppliers, that means AI demand increasingly reaches deep into specialty metals and advanced materials supply chains.

Corning's expansion shows how data center investment can translate into new demand for physical infrastructure and strategic raw materials far beyond the semiconductor sector.

The Metalnomist Commentary

AI infrastructure is becoming a broad materials story, not just a chip story. As hyperscale data centers expand, germanium and optical fiber capacity could become increasingly strategic bottlenecks.

Amazon Corning Fiber Optics Deal Expands US Data Center Supply Chain

Corning

Amazon Corning fiber optics investment will expand US manufacturing capacity for optical fiber, cable and connectivity systems used in hyperscale data centers. Amazon plans multibillion-dollar investment under a multi-year supply agreement with Corning.

Amazon Corning fiber optics partnership reflects the growing infrastructure requirements behind artificial intelligence and cloud computing. Higher computing density requires faster data transmission between servers, accelerators and data centers, making optical connectivity an increasingly strategic component.

Amazon Corning fiber optics expansion also has implications for specialty metals. Fiber optics are the largest end-use market for germanium in the US, linking rapid data center construction with demand for a highly concentrated critical mineral.

The partnership will also create around 1,000 advanced manufacturing jobs in North Carolina and expand training for fiber optic technicians.

AI Data Centers Drive Optical Fiber Capacity Expansion

Amazon will use Corning's optical fiber, cable and connectivity products across its data center network. The agreement gives Corning a large anchor customer as it expands domestic production.

Data center growth is changing the materials required for digital infrastructure. AI systems need enormous computing capacity, but processors are useful only if data can move between them quickly enough.

Optical fiber addresses that bottleneck by supporting high-speed, high-bandwidth transmission over distances where conventional electrical connections become less efficient.

This means AI investment is increasingly spreading beyond semiconductor chips into photonics, optical networking, power equipment, cooling systems and grid infrastructure.

Corning expects to increase fiber production by more than 50%. The company is also planning three new manufacturing facilities in North Carolina and Texas through its partnership with Nvidia.

The combination of Amazon and Nvidia demand gives Corning strong visibility for future capacity utilisation. It also strengthens the case for further US investment in optical connectivity manufacturing.

Germanium Becomes More Exposed to Data Center Growth

The expansion carries a direct critical minerals angle because germanium is widely used in optical fiber production. The US fiber optics industry is already the country's largest end-user of the metal.

Germanium is used to modify the refractive properties of glass in fiber optic systems, making it an important material for high-performance communications infrastructure.

That creates a new demand link between AI investment and minor metals. Rapid data center expansion can increase germanium consumption even though only relatively small quantities are used in individual fiber products.

Supply security therefore matters. Germanium production and processing remain geographically concentrated, making diversified sourcing increasingly important as optical infrastructure expands.

For Amazon and other hyperscale data center operators, secure connectivity supply will become as important as access to processors and power. For Corning, the opportunity lies in combining domestic manufacturing scale with long-term demand from major technology customers.

The wider industrial message is clear. AI infrastructure is creating new demand not only for copper and semiconductors, but also for specialty materials embedded deeper inside optical communications systems.

The Metalnomist Commentary

Amazon's investment shows that the AI infrastructure race is moving into optical connectivity and its upstream materials. Germanium could become one of the quieter beneficiaries as data centers require increasingly dense, high-speed fiber networks.

Texas LFP Plant Links Domestic Lithium Supply With Cathode Production

EnergyX

Texas LFP plant development is moving forward after Wildcat Discovery Technologies and EnergyX formed a joint venture to produce lithium iron phosphate cathode active material in Hooks. The project represents more than $230mn of investment and is designed for around 15,000 t/yr of CAM capacity.

Texas LFP plant plans are strategically important because the facility will sit next to EnergyX’s Lonestar lithium project in the Smackover formation. This creates a potential domestic route from lithium extraction and conversion to cathode material production.

Texas LFP plant supply will also benefit from a structured lithium pricing agreement. EnergyX will provide lithium carbonate to the joint venture at commercially favourable terms, including a market discount and price floor and ceiling intended to reduce exposure to lithium price volatility.

The project strengthens US efforts to localise more of the battery value chain, particularly for LFP chemistry used in electric vehicles and stationary energy storage.

Co-Location Reduces Battery Supply Chain Risk

The Hooks facility is designed to produce about 15,000 t/yr of LFP cathode active material, with potential for future expansion.

Its location beside EnergyX’s Lonestar lithium operation is the project’s main industrial advantage. Co-locating lithium supply and cathode production can reduce logistics complexity, shorten supply chains and improve feedstock security.

EnergyX plans to produce 48,500 t/yr of lithium hydroxide at Lonestar by 2030. The first phase is expected to reach 14,250 t/yr by 2028.

The project is targeting operating expenditure of about $3.85/kg, which could strengthen the economics of downstream battery material production if that cost structure is achieved at scale.

The joint venture will initially receive lithium carbonate under a pricing structure that limits exposure to extreme market movements. This gives the cathode operation greater cost visibility during periods of lithium volatility.

For battery materials projects, this kind of feedstock agreement can be as important as plant capacity. Cathode producers need reliable supply, predictable chemistry and manageable pricing to compete with established Asian producers.

LFP Growth Supports US Battery Localization

LFP chemistry is gaining market share because it offers lower cost, strong cycle life and improved thermal stability compared with nickel-rich cathode systems.

It also avoids nickel and cobalt, reducing exposure to two globally concentrated and price-sensitive battery metals. However, LFP still depends heavily on lithium supply and specialised cathode manufacturing capability.

The Wildcat-EnergyX project therefore addresses two major US supply-chain gaps at the same time: domestic lithium production and domestic cathode active material manufacturing.

Stationary energy storage is likely to be an important demand source. Large grid batteries increasingly favour LFP because of its durability, safety characteristics and lower material cost.

EV demand could provide another growth route, particularly as automakers expand lower-cost vehicle platforms using LFP cells.

The project also illustrates a wider shift in US battery strategy. Rather than building isolated mines or chemical plants, developers are increasingly trying to connect extraction, conversion and active material production within regional industrial clusters.

The Metalnomist Commentary

The Wildcat-EnergyX venture is strategically stronger because it links lithium supply directly with LFP cathode production. US battery localization will depend less on individual plants and more on integrated regional chains that control feedstock, processing and pricing risk.

MP Materials USAR Lawsuit Raises Stakes in US Rare Earth Magnet Race

MP Materials USAR

MP Materials USAR lawsuit has opened a new front in the race to build domestic rare earth magnet capacity, with MP accusing rival USA Rare Earth of misappropriating proprietary magnet technology through a former employee. The dispute centres on grain boundary diffusion technology, a key process used to improve high-performance neodymium-iron-boron magnets.

MP Materials USAR lawsuit was filed in Texas Business Court on 26 May. MP is seeking injunctions against all USAR entities and alleges that a former employee improperly disclosed sensitive formulas and processes to the rival company.

MP Materials USAR lawsuit is strategically important because both companies are building large US magnet production platforms. The dispute could affect investor confidence, customer qualification and the timing of domestic magnet supply for defence, automotive and industrial users.

The case also shows that the US rare earth sector has moved beyond mining and separation. Competition is now intensifying around process know-how, metallization, alloying, powder metallurgy and magnet finishing.

Grain Boundary Diffusion Becomes a Competitive Battleground

Grain boundary diffusion is an important technology in high-performance NdFeB magnet production. It can improve magnet performance and reduce the use of costly heavy rare earths in certain applications.

That makes the process commercially valuable. Rare earth magnets used in defence, electric motors, robotics and aerospace systems must meet strict performance, heat resistance and reliability requirements.

MP alleges that its proprietary grain boundary diffusion technology was developed through years of work and significant investment. The company claims former employee Kevin Elkins had access to extremely sensitive formulas and processes before joining USAR.

MP also alleges that USAR recruited several MP employees since 2025, including Elkins and at least seven other key staff. MP described this as part of a broader trade secret raiding campaign.

These remain allegations, and the court process will determine the outcome. But the filing highlights a real industrial issue: skilled people and protected know-how are now as important as rare earth feedstock in the US magnet supply chain.

Legal Dispute Adds Risk to Domestic Magnet Scale-Up

Both companies are trying to scale US magnet production quickly. MP is expanding its Independence facility in Fort Worth, Texas, to 3,000 t/yr, including metallization, alloying, powder metallurgy, grain boundary diffusion and magnet finishing.

MP is also building a larger Texas facility to raise total magnet production to 10,000 t/yr. That expansion is central to its ambition to create a fully integrated rare earth-to-magnet supply chain in the US.

USAR also plans to produce 10,000 t/yr of magnets by 2029, up from current capacity of 4,800 t/yr. The overlap between these expansion targets makes the legal dispute commercially sensitive.

For the US government and downstream customers, the case creates a difficult dynamic. Washington needs multiple domestic magnet suppliers, but those suppliers also need enforceable intellectual property protections.

The dispute could slow collaboration, complicate customer qualification or increase caution around hiring and technology transfer. It may also push rare earth companies to tighten controls over employee access, process documentation and proprietary manufacturing routes.

The broader message is clear. Domestic magnet capacity will not be secured only through capital spending. It will require protected process technology, skilled labour, validated production and trusted commercial behaviour.

The Metalnomist Commentary

The MP-USAR dispute shows that the rare earth magnet race is becoming a technology and intellectual property contest. The US needs faster magnet scale-up, but it also needs clear rules that protect proprietary process know-how while keeping domestic supply-chain development on track.

AML Defense Magnet Contract Advances Domestic NdFeB Qualification for US Supply Chains

Advanced Magnet Lab

AML defense magnet contract award marks another step in the US effort to qualify domestic neodymium-iron-boron magnets for defence applications. Advanced Magnet Lab received a $2mn contract from the Defense Logistics Agency to support high-grade magnet qualification.

AML defense magnet contract work will run over two years and covers supply chain management, alloying and permanent magnet manufacturing. The award is small in value, but important in strategic function.

AML defense magnet contract support matters because NdFeB magnets remain one of the most exposed links in US defence and advanced manufacturing supply chains. The US needs not only rare earth oxides, but qualified metals, alloys and finished magnets.

The contract also shows that Washington is moving beyond upstream rare earth projects. Defence supply security now depends on converting NdPr and dysprosium feedstock into magnets that can meet military performance and qualification requirements.

Qualification Becomes the Real Magnet Supply Bottleneck

AML said it uses a new manufacturing process that simplifies production and expands options for magnet design, materials and performance. That could help the company tailor magnets for different defence and industrial applications.

This is important because magnet qualification is a long and demanding process. Defence customers need consistent magnetic performance, material reliability, traceable feedstock and controlled production routes.

NdFeB magnets are critical for motors, actuators, sensors, guidance systems, aerospace platforms, robotics and other high-performance equipment. Dysprosium is especially important where magnets must retain performance under high temperatures.

The DLA award therefore targets a practical bottleneck. The US cannot build a secure magnet supply chain by mining rare earths alone. It must also qualify alloying, metallisation and final magnet manufacturing.

For AML, the contract gives validation from a defence procurement agency. For the broader market, it signals that domestic magnet capacity is becoming a formal industrial security priority.

Feedstock Partnerships Support Non-China Magnet Strategy

AML sources magnet feedstock from US and European rare earth suppliers. This sourcing strategy is central to building a more resilient magnet supply chain outside China.

Phoenix Tailings will supply neodymium-praseodymium and dysprosium metals. That gives AML access to rare earth metal feedstock, which is a critical step between oxide production and magnet manufacturing.

Ionic Rare Earths will supply NdPr and dysprosium oxides. Texas-based Momentum is also a likely supplier of NdPr oxides.

This mix of suppliers shows how the US magnet chain is being built through multiple feedstock routes. Oxides, metals, alloying and magnet production must connect before customers can receive usable products.

The strategic issue is integration. Rare earth projects often focus on mining or separation, but magnet production requires many precise steps after that.

AML’s DLA contract highlights the direction of US policy. Washington is trying to create a qualified domestic magnet ecosystem by linking defence demand with non-China feedstock and manufacturing capability.

The Metalnomist Commentary

AML’s contract is small, but its significance is large because magnet qualification is one of the hardest gaps in the US rare earth chain. The next competitive advantage will come from companies that can connect NdPr, dysprosium, alloying and finished magnet performance into one trusted defence-ready platform.

Corning Nvidia Optical Connectivity Partnership Expands US AI Infrastructure Supply Chain

Corning

Corning Nvidia optical connectivity plans will expand US manufacturing capacity for the optical systems needed to support artificial intelligence data centres. Corning will build three new manufacturing facilities in North Carolina and Texas as it targets a tenfold increase in optical connectivity output.

Corning Nvidia optical connectivity investment also includes a more than 50% expansion in Corning’s fibre production. The move reflects rising demand for high-speed data movement across AI infrastructure, where advanced optical links are becoming as important as chips themselves.

Corning Nvidia optical connectivity partnership strengthens the domestic supply chain around Nvidia’s AI computing ecosystem. Nvidia chips require high-performance optical fibre connectivity to move data quickly and at scale across large data centre networks.

The agreement also has a strategic materials angle. The fibre-optics industry is the largest US end-user of germanium, making AI data centre buildout increasingly relevant to minor metals demand.

AI Data Centres Drive Optical Connectivity Demand

AI workloads require massive data movement between chips, servers and storage systems. As computing clusters grow, copper-based connections face performance, distance and energy-efficiency limits in some high-speed applications.

Optical connectivity helps solve that problem. It allows data to move faster and across longer distances, supporting the scale required by advanced AI data centres.

Corning’s planned facilities in North Carolina and Texas will increase domestic capacity for these optical systems. That is important because AI infrastructure is becoming a national industrial priority, not only a technology market.

For Nvidia, the partnership supports the physical network behind its chips. AI accelerators create value only when data can move efficiently through the system.

For Corning, the deal gives stronger exposure to one of the fastest-growing infrastructure markets. Optical fibre, cable assemblies and connectivity products are becoming critical components in the AI supply chain.

Germanium Demand Links AI Growth to Critical Materials

The partnership also connects AI infrastructure to germanium demand. Germanium is used in optical fibre production, making fibre expansion relevant to critical minerals and specialty materials markets.

This matters because germanium supply is already strategically sensitive. It is used in fibre optics, infrared systems, semiconductors, defence electronics and solar applications.

If AI data centre construction accelerates, optical fibre demand could strengthen further. That would increase attention on germanium availability, recycling, refining and origin security.

The transaction also includes a financial component. Nvidia has the right to purchase up to 15mn shares of Corning stock at a fixed price of $180/share, as well as a pre-funded warrant to purchase up to 3mn shares for a total price of $500mn.

That structure shows how strategic customers are moving closer to upstream and midstream suppliers. Nvidia is not only buying components. It is helping secure the manufacturing base needed for future AI infrastructure.

For the US, the partnership supports domestic manufacturing around semiconductors, photonics and critical materials. It also reinforces the wider shift toward regionalised supply chains for high-value technology infrastructure.

The Metalnomist Commentary

The Corning-Nvidia partnership shows that AI supply chains are moving beyond chips into optical fibre, photonics and specialty materials. Germanium demand could become a hidden beneficiary as data centres require faster and more resilient optical connectivity.

ATI Aerospace and Defense Demand Lifts 2026 Guidance

ATI

ATI aerospace and defense demand strengthened in the first quarter, prompting the specialty alloys manufacturer to raise its full-year earnings outlook. The Texas-based company lifted its 2026 adjusted profit guidance by $35mn to $1.01bn-1.06bn.

ATI aerospace and defense demand was strongest in jet engine materials, defence alloys and missile-related products. The company exceeded the high end of its first-quarter forecast by nearly $7mn, reporting adjusted profit of $232mn.

ATI aerospace and defense demand shows that high-performance metals remain central to the aircraft production ramp and defence replenishment cycle. Titanium, nickel-based alloys, isothermal forgings, zirconium and hafnium are all tied to programmes where qualification, lead times and supply reliability matter.

Quarterly profit rose by 20% on the year to nearly $120mn, while revenue increased by 6.2% to almost $1.2bn.

Jet Engine Materials Keep Specialty Alloy Lead Times Tight

Commercial jet engine sales rose by 12% on the year to $472mn, making the segment ATI’s largest product category. The company expects mid-teens growth in jet engine sales this year.

Demand is being driven by original equipment manufacturers and aftermarket service providers. Both need reliable access to specialty alloys and isothermal forgings as engine production and repair activity expand.

This is strategically important because jet engines consume some of the most demanding materials in the aerospace supply chain. Nickel-based superalloys, titanium alloys and premium-quality forgings must meet strict performance standards under heat, stress and fatigue conditions.

ATI is also working to qualify its new electron-beam furnace for premium-quality titanium at its Richland, Washington facility. This material is used in rotor-grade engine parts.

Approval of the furnace would help reduce pressure on ATI’s other premium-quality titanium melting operations. Some lead times for this material are now close to two years.

That lead-time signal matters. Aerospace buyers are not only chasing capacity. They are trying to secure qualified melt routes for materials that cannot be easily substituted.

Commercial airframe sales moved lower in the first quarter, falling by 9.3% to nearly $187mn. Airframers and OEMs continued drawing down internal stocks of raw materials and components.

However, ATI expects full-year airframe sales to grow by mid-to-upper single digits, with demand backloaded into the second half as inventories normalise. This should support stronger sales of standard-quality titanium used in structural aircraft components.

The company also expects much stronger titanium sales growth in 2027, based on long-term order patterns and customer production plans.

Defence Orders Strengthen Zirconium, Hafnium and Missile Materials

Defence sales rose by 9.3% on the year to $139mn in the first quarter. ATI expects full-year defence revenue to rise by low-to-mid teens from 2025 levels.

The company renewed a five-year, $1bn contract supporting the US Naval Nuclear Propulsion Program. This will drive continued demand for specialty alloys containing zirconium and hafnium.

Zirconium and hafnium are strategically important in nuclear and defence supply chains. Their use requires tight quality control, reliable processing and long-term customer qualification.

Missile-related demand also strengthened. ATI said first-quarter missile revenue doubled from a year earlier as contractors increased production and replenished munitions inventories.

The company supplies titanium and nickel products used in structural and propulsion applications for missile programmes, including Tomahawk, Patriot Advanced Capability-3 and Terminal High Altitude Area Defense interceptors.

Nickel-based and specialty alloys remained ATI’s largest revenue source, accounting for 49% of total sales in the quarter. Precision forgings, castings and components accounted for 20%, while titanium and titanium-based alloys represented 17%.

The mix shows ATI’s strategic position. The company is exposed to aerospace engine growth, defence replenishment, naval nuclear programmes and missile production, all of which depend on hard-to-qualify specialty metals.

ATI’s raised guidance therefore reflects more than a cyclical recovery. It points to structural demand for advanced materials across aerospace, defence and energy-security-related programmes.

The Metalnomist Commentary

ATI’s guidance increase confirms that aerospace and defence demand is pushing pressure upstream into qualified melt capacity and specialty alloys. The real bottleneck is not generic metal supply, but premium titanium, nickel alloys, zirconium, hafnium and forgings that meet mission-critical specifications.

Pratt & Whitney Capacity Expansion Targets Forgings and GTF MRO Bottlenecks

Pratt & Whitney

Pratt & Whitney capacity expansion plans will add production and aftermarket capability across commercial and defence engine programmes. The RTX subsidiary will invest $200mn to increase engine component output and strengthen maintenance, repair and overhaul capacity.

Pratt & Whitney capacity expansion is strategically important because the company remains under pressure to improve geared turbofan engine deliveries for Airbus narrowbody aircraft. It must also support defence engine demand tied to F-15, F-16 and F-35 fighter programmes.

The investment will be split between manufacturing and GTF engine MRO. Half will support a new facility in Rzeszow, Poland, while the remaining $100mn will expand three US aftermarket sites.

The plan shows how aerospace supply chains are moving deeper into materials and repair bottlenecks. Engine production now depends on qualified forgings, titanium and nickel disks, powder metallurgy control, spare parts availability and faster shop-visit turnaround.

Rzeszow and Columbus Expand Forging Disk Output

Pratt & Whitney will invest $100mn in a new facility at its Rzeszow site in Poland. The facility will include equipment to heat treat, machine and test isothermal forgings.

The Polish operations support components for GTF engines used on Airbus narrowbody aircraft. They also support F100 and F135 engines used in F-15, F-16 and F-35 fighter programmes.

The Rzeszow expansion will support Pratt & Whitney’s plan to add a seventh isothermal forging press at its Columbus, Georgia manufacturing campus. Both projects are expected to be operational by 2028.

The combined investments are expected to increase output of nickel- and titanium-based compressor and turbine disks by 30%. These disks are critical rotating components in high-performance jet engines.

This matters for metals supply chains. Titanium compressor disks and nickel turbine disks require strict chemistry control, high-quality melting, forging, heat treatment and inspection.

Isothermal forging is especially important because it supports complex, high-strength components used under demanding temperature and stress conditions. Capacity expansion in this area directly affects engine production reliability.

Pratt & Whitney capacity expansion therefore targets one of the most sensitive parts of the aerospace supply chain. More disk capacity can help reduce constraints in both new engine output and spare parts availability.

GTF Aftermarket Investment Targets Turnaround Times

Pratt & Whitney will also invest $100mn across three US MRO sites to expand aftermarket capacity for the GTF engine. The sites are located in Irving, Texas, West Palm Beach, Florida, and Springdale, Arkansas.

Most of the MRO funding will go to Irving. The investment will add new equipment, increase on-site inventory and expand facility footprints.

The goal is to improve throughput and reduce repair turnaround times. This is crucial because GTF fleet issues have created heavy demand for inspections, shop visits and replacement parts.

The investment follows a $70mn expansion at Pratt & Whitney’s Columbus aftermarket services operation earlier this year. That project increased annual overhaul capacity by 25%.

Pratt & Whitney has been under pressure from Airbus because GTF delivery shortfalls have affected aircraft ramp-up plans. The company’s large commercial engine shipments fell by 15 units year on year to 235 in the first quarter.

The main challenge is balancing new engine production with spare parts and repair demand. A powder metal issue identified in 2023 forced accelerated inspections and potential rework across hundreds of A320neo aircraft.

Durability has also been a point of tension. European regulators approved Pratt & Whitney’s GTF Advantage for the A320neo on 17 April, and the upgrade is expected to double time on wing. An upgrade kit for in-service engines is expected later this year.

The MRO investment is therefore not only a repair capacity expansion. It is part of a wider effort to stabilise the GTF fleet, rebuild Airbus confidence and improve engine availability across the installed base.

The Metalnomist Commentary

Pratt & Whitney capacity expansion shows that aerospace bottlenecks are now concentrated in qualified materials, forgings and MRO infrastructure. The company’s ability to restore GTF reliability will depend as much on titanium and nickel disk capacity as on final engine assembly.

USA Rare Earth Serra Verde Acquisition Builds Ex-China Magnet Supply Chain

Serra Verde Group

USA Rare Earth Serra Verde acquisition will give the US rare earth producer direct access to one of the most important heavy rare earth projects outside China. The company has agreed to acquire Brazil’s Serra Verde Group for $2.8bn, accelerating its strategy to build a fully integrated mine-to-magnet supply chain.

The deal includes $300mn in cash and 126.85mn USA Rare Earth shares. After completion, USA Rare Earth shareholders will own 66% of the combined company, while Serra Verde shareholders will own 34%.

USA Rare Earth Serra Verde acquisition is strategically important because Serra Verde owns the Pela Ema ionic clay mine in Brazil. The project targets production of 6,400 t/yr of rare earth oxides by the end of 2027, with plans to double output later.

The acquisition gives USA Rare Earth exposure to four key magnet rare earth elements: neodymium, praseodymium, dysprosium and terbium. These materials are essential for high-performance permanent magnets used in electric vehicles, wind turbines, robotics, aerospace, defence systems and advanced industrial motors.

The transaction also strengthens the company’s position in yttrium. Initial Serra Verde output is expected to include 1,534 t/yr of yttrium, a material whose price has risen sharply in the US market and which has strategic applications in ceramics, phosphors, electronics, alloys and defence-related materials.

Serra Verde Adds Heavy Rare Earth Feedstock and Price-Floor Protection

Serra Verde’s Pela Ema project gives USA Rare Earth a near-term rare earth oxide production base. Ionic clay deposits are strategically attractive because they can contain valuable heavy rare earths such as dysprosium and terbium.

Initial planned output of 6,400 t/yr of rare earth oxides is expected to include 164 t/yr of dysprosium and 29 t/yr of terbium. These are small volumes compared with light rare earths, but they carry high strategic value because they improve magnet performance in high-temperature applications.

Dysprosium and terbium are especially important for permanent magnets used in EV traction motors, wind turbine generators, industrial robotics, guided systems and aerospace components. Without these elements, magnets can lose performance under heat and stress.

The deal also includes a 15-year offtake agreement previously signed by Serra Verde with a special-purpose vehicle funded by US government agencies, including the Department of Commerce and Department of Energy. This gives the project a policy-backed commercial structure rather than relying only on spot-market sales.

The offtake agreement includes price floors for neodymium, praseodymium, dysprosium and terbium. Floors are set at $110/kg for neodymium and praseodymium, $575/kg for dysprosium and $2,050/kg for terbium.

This structure is important because rare earth projects outside China often struggle when prices fall. Price floors can improve project bankability by protecting revenues and reducing the risk that China-linked supply undercuts new producers during market downturns.

Serra Verde will also share 70% of non-China index prices above the floor, net of separation costs. This gives the project exposure to upside while maintaining downside protection.

The company can also monetise non-offtake elements, including yttrium. That flexibility matters because ionic clay resources can contain multiple valuable rare earths beyond the main magnet feedstocks.

The market timing is favourable for heavy rare earth producers. US yttrium oxide prices have risen sharply, while dysprosium and terbium remain high-value magnet materials. Supply chains outside China remain thin, and buyers are increasingly focused on traceable, geopolitically secure material.

However, the acquisition does not remove execution risk. Serra Verde must still deliver target output, manage ramp-up, maintain product quality and connect mine production with separation, metal and magnet capacity.

Mine-to-Magnet Roll-Up Tests Western Rare Earth Integration

USA Rare Earth Serra Verde acquisition is part of a broader roll-up strategy. The company is building its supply chain through acquisitions rather than waiting for long greenfield development timelines.

USA Rare Earth bought UK-based Less Common Metals for $125mn in November. Less Common Metals gives the company rare earth metal and alloy production capability, a critical midstream step between separated oxides and finished magnets.

The company also acquired Texas Mineral Resources for $73mn in March to secure the Round Top heavy rare earth project in Texas. Round Top adds a US-based heavy rare earth resource to the group’s upstream portfolio.

Together, Serra Verde and Round Top are expected to give the combined company 17,100 t/yr of rare earth oxide mining capacity. Separation capacity will total 13,000 t/yr, while expanded metal and magnet-making capacity is planned at 27,500 t/yr and 10,000 t/yr, respectively.

This integration is the key point. Rare earth supply security cannot be solved by mining alone. Ore or concentrate must be separated, refined, converted into metals, alloyed and manufactured into magnets before it can support industrial customers.

Many western rare earth projects fail to cover the full chain. Some have resources but no separation. Others have separation but no heavy rare earth feedstock. Some can produce oxides but lack metal conversion and magnet-making capacity.

USA Rare Earth argues that the merged company will be the only fully integrated magnet supplier outside China. The claim reflects the company’s attempt to combine upstream heavy rare earth resources, separation, metal production and magnet manufacturing in one platform.

That structure could be attractive to customers in defence, aerospace, automotive, robotics and clean energy. These buyers increasingly need non-China supply options that can meet origin, traceability, qualification and security requirements.

The US government-backed offtake component also shows how rare earth supply chains are changing. Western governments are no longer relying only on free-market procurement. They are using price floors, strategic vehicles, financing support and industrial policy to build alternative supply.

Still, integration brings complexity. USA Rare Earth must combine assets across Brazil, Texas, the UK and planned downstream facilities. It must align mining output, separation chemistry, metal production, magnet capacity, customer qualification and government-backed offtake obligations.

The valuation also raises expectations. A $2.8bn acquisition price gives Serra Verde a large strategic premium. The deal will need to deliver heavy rare earth output, stable separation economics and customer demand to justify that value.

The broader market implication is clear. Heavy rare earth supply is becoming the strategic centre of the magnet market. Neodymium and praseodymium remain essential, but dysprosium and terbium determine performance in the most demanding applications.

China still dominates much of the rare earth separation, metal and magnet chain. The USA Rare Earth-Serra Verde deal is an attempt to create an alternative industrial route at scale.

If successful, the combined company could become a rare western platform with upstream resources, heavy rare earth exposure, midstream conversion and downstream magnet capability. If execution slips, it will show again how difficult it is to recreate China’s integrated rare earth ecosystem outside China.

The Metalnomist Commentary

USA Rare Earth Serra Verde acquisition shows that the rare earth race is shifting from single-asset mining stories to integrated supply-chain control. The deal’s real test will be whether USA Rare Earth can turn Brazilian ionic clay output, US heavy rare earth resources, separation capacity and magnet production into a bankable ex-China magnet platform.

USA Rare Earth Yttrium Metal Pour Strengthens Downstream Rare Earth Strategy

USA Rare Earth

USA Rare Earth yttrium metal production has reached a commercial milestone after the company completed its first pour through wholly owned subsidiary Less Common Metals. The yttrium metal was produced at LCM’s Cheshire site in the UK with purity of 99-99.5%.

The company did not disclose production volume. However, the first commercial pour is strategically important because it moves USA Rare Earth further downstream from rare earth resource development into metal-making capability.

USA Rare Earth yttrium metal output supports the company’s broader plan to serve aerospace, defense and advanced manufacturing customers. These sectors need reliable rare earth metals, alloys and magnet-related materials from supply chains outside China-dominated processing routes.

The milestone follows USA Rare Earth’s acquisition of Less Common Metals in September 2025 for $125mn. It also comes shortly after the company took control of the Round Top heavy rare earth project in Texas, where commercial production is scheduled to begin in 2028.

Less Common Metals Adds Rare Earth Metal-Making Capacity

Less Common Metals gives USA Rare Earth an established metal-making platform before Round Top enters production. This is important because rare earth supply security depends on more than mining and oxide production.

Rare earth oxides must be converted into metals and alloys before they can support magnets, aerospace materials, defense systems and other advanced industrial applications. Metal conversion remains one of the most important bottlenecks in western rare earth supply chains.

LCM has 1,500 t/yr of metal-making capacity. The company also plans to add 26,000 t/yr of strip casting capacity in the UK, US and France by 2030.

That planned expansion could give USA Rare Earth a stronger position in downstream magnet and alloy supply. Strip casting is especially relevant for producing rare earth alloy feedstock used in permanent magnet manufacturing.

Yttrium has important applications in aerospace, defense, ceramics, phosphors, electronics, superalloys and advanced materials. While it does not receive the same attention as neodymium or dysprosium, yttrium remains strategically relevant because it supports high-performance material systems.

USA Rare Earth yttrium metal production therefore shows that the company is targeting a broader rare earth platform. It is not only focused on magnet rare earths, but also on heavy rare earth and specialty material supply chains.

Round Top Could Link Extraction, Oxides and Metals

The Round Top heavy rare earth project is central to USA Rare Earth’s long-term strategy. The company took over the Texas project in March, with commercial production planned for 2028.

Round Top is expected to support future yttrium extraction and broader heavy rare earth output. When combined with oxide processing and LCM’s metal-making capability, the project could create a more integrated rare earth supply chain.

This integration matters for US industrial policy. Western governments are trying to reduce dependence on China not only for rare earth mining, but also for separation, metal conversion, alloying and magnet production.

USA Rare Earth’s model addresses several of those links. Round Top provides the upstream resource base, oxide processing supports chemical conversion, and LCM adds rare earth metal production expertise.

The first yttrium metal pour does not yet prove full-scale supply. But it demonstrates that USA Rare Earth now has a working downstream route while it prepares Round Top for commercial production.

For aerospace and defense buyers, this could be valuable. Qualification cycles are long, and customers often need proven process capability before committing to strategic materials supply.

The next challenge will be scale. USA Rare Earth must align Round Top development, oxide processing, LCM capacity and customer qualification into a reliable commercial system.

The Metalnomist Commentary

USA Rare Earth’s first yttrium metal pour shows that rare earth competition is moving beyond mining projects. The real strategic value will come from linking heavy rare earth resources with oxide processing, metal conversion and alloy capacity for defense and advanced manufacturing.

Indium Phosphide Exports Become China’s New Chokepoint in AI Data Centre Supply Chain

AI data centre

Indium phosphide exports have become a strategic pressure point in the global AI data centre supply chain as China’s licensing controls delay shipments of a material essential for high-speed optical chips. The restrictions are exposing a new vulnerability in AI infrastructure: the physical materials behind silicon photonics and optical interconnects.

The issue has moved quickly from a specialist semiconductor concern to a high-level trade and industrial policy problem. Coherent, a key optical components supplier backed by Nvidia, warned in early May that indium phosphide shortages were already affecting the market. Its chief executive then joined a US business delegation to China as companies sought relief from export licence delays.

Indium phosphide exports matter because AI data centres are moving beyond copper-based interconnects. As AI workloads grow, hyperscalers need faster, lower-latency and more energy-efficient data transmission between processors, accelerators, switches and optical modules. Indium phosphide is one of the core materials enabling that shift.

The material is used in high-speed optical chips, lasers, detectors and photonic components. These devices support the optical links that move huge volumes of data across AI clusters. Without reliable indium phosphide substrates and wafers, the expansion of advanced AI data centre networks could slow.

China’s control over indium phosphide exports shows that critical materials policy is becoming more granular. Beijing no longer needs to restrict only rare earths or finished technology products. It can also influence upstream compounds, substrates and wafers that determine whether advanced semiconductor supply chains can scale.

Export Controls Expose a Hidden Bottleneck in Silicon Photonics

Silicon photonics has become a critical technology for AI infrastructure because it allows data to move through light rather than electrical signals. This reduces energy use per bit and supports the bandwidth required by large AI systems.

But silicon photonics is not only a silicon story. The most advanced optical systems often require compound semiconductor materials such as indium phosphide, gallium arsenide, gallium nitride and germanium-based compounds. Indium phosphide is especially important for lasers and high-speed optical devices.

This creates a difficult supply chain problem. AI companies, hyperscalers and chipmakers are racing to scale optical modules, but one of the key substrate materials remains highly concentrated. China is the world’s largest indium producer, accounting for about 70% of global output in 2024.

That concentration became more serious after China introduced export restrictions on indium phosphide in February 2025. Since then, licence delays have created backlogs for companies that manufacture or source InP substrates from China.

AXT, one of the world’s largest indium phosphide substrate producers and a major supplier to Coherent, said export permits were its most significant challenge. The company manufactures most of its InP substrates in China and only received its first permits last June. It still faces a large order backlog.

The effect has spread beyond individual suppliers. Coherent, Lumentum, VPEC and LandMark Optoelectronics all sit inside the optical components ecosystem that depends on reliable substrate supply. When permit delays hit upstream InP material, the impact moves through wafers, chips, optical modules and AI data centre equipment.

Prices show the severity of the shortage. Since China introduced export restrictions, the average price of a 6-inch indium phosphide wafer has surged by 250% to about $5,000. That price increase reflects both physical scarcity and the strategic premium attached to non-disrupted supply.

The supply squeeze also comes at a time of aggressive photonics investment. Nvidia announced $2bn investments each in Coherent and Lumentum in March. Marvell Technology also moved into photonics through its acquisition of Celestial AI, reflecting stronger demand for optical technology in AI computing.

These investments show where the industry is heading. AI infrastructure needs optical interconnects to manage power, latency and bandwidth. But China’s indium phosphide controls mean that materials availability could become a gating factor for deployment.

Companies are trying to respond. Coherent plans to double its InP wafer capacity at its Texas plant this year and more than double it again by the end of 2027. US photonics firms are also seeking supply from non-Chinese producers such as Sumitomo Electric Industries.

However, capacity additions are slow. New substrate plants can take two to three years to bring online. Qualification cycles are also long because optical chipmakers cannot easily switch substrate suppliers without testing performance, reliability and consistency.

This makes the shortage difficult to solve quickly. Even if new capacity is announced, it may not arrive fast enough to meet near-term AI data centre demand. Meanwhile, many non-China producers already consume part of their own output internally, reducing the amount available to the broader market.

China’s Materials Chokepoint Strategy Strengthens Domestic Producers

China’s indium phosphide export controls are creating both pressure and opportunity. They restrict global supply, but they also support domestic Chinese substrate producers that are expanding capacity.

Yunnan Germanium, Guangdong Xiandao and Zhuhai Dingtai Xinyuan are among China’s leading domestic InP substrate players. Their role is becoming more important as Beijing uses materials controls to strengthen strategic leverage across semiconductor and AI supply chains.

Yunnan Germanium has already moved to expand. The company announced a 189mn yuan investment in April to raise production capacity to 450,000 single InP wafers annually. Its shipments of InP wafers rose by 74% in 2025, showing fast domestic market growth.

Guangdong Xiandao is also expanding through its subsidiary Guangdong Xianrui. The project is expected to produce 40 t/yr of indium phosphide crystals, which are used as raw material for substrates.

These investments fit a broader pattern. China is not only defending control over upstream critical materials. It is also building downstream processing capacity in higher-value compound semiconductor materials.

However, Chinese producers may not immediately solve the global shortage. Some are still seeking export approvals, and any overseas shipments may be limited. Domestic demand remains a priority, especially as China builds its own AI, optical communications and semiconductor ecosystem.

AXT

Supplier qualification creates another barrier. Companies such as Coherent and Lumentum are unlikely to switch easily from established suppliers. Coherent relies heavily on AXT, while Lumentum sources mainly from Sumitomo and JX Advanced Metals. New suppliers must pass demanding qualification cycles before they can enter critical optical chip supply chains.

This gives China’s export controls a long-lasting effect. Even if alternative suppliers exist, the market cannot instantly redirect demand. The bottleneck is not only production volume. It is qualified, high-quality, customer-approved substrate supply.

The strategic lesson is clear. AI supply chains are not only exposed to advanced chips, GPUs and packaging capacity. They also depend on a deep materials stack that includes indium, phosphorous chemistry, InP crystals, substrates, wafers, lasers, detectors and optical modules.

This is why indium phosphide exports have become so important. AI data centre buildouts need more optical links as clusters grow larger. Copper interconnects face limits in speed, distance and energy consumption. Photonics offers a solution, but only if the materials chain can scale.

For the US and its allies, the response will likely require more than emergency licence negotiations. It will require investment in indium recovery, InP crystal growth, substrate manufacturing, wafer capacity and long-term offtake agreements. It may also require strategic stockpiles for high-purity indium and compound semiconductor substrates.

The issue also strengthens the case for recycling and secondary recovery. Indium is often produced as a by-product, making primary supply difficult to expand quickly. Recovering indium from industrial scrap, displays, semiconductors and related waste streams could become more important if export controls persist.

For AI data centre developers, the risk is timing. Demand for optical modules is accelerating now, while new ex-China capacity may not fully arrive until 2027 or later. That mismatch could raise costs, delay deployments and intensify competition for qualified photonics suppliers.

The market may therefore see a split. Companies with secured InP supply will be better positioned to support hyperscaler demand. Companies exposed to licence delays, qualification bottlenecks or spot-market wafers may face higher costs and delivery risk.

The Metalnomist Commentary

China’s control over indium phosphide exports shows that the AI race is becoming a materials race. The next bottleneck may not be only GPUs or power supply, but the compound semiconductor substrates needed to move data fast enough inside AI clusters.

High-Purity Iron Plant Targets US Rare Earth Magnet Supply Gap

Hertha Metals

High-purity iron is emerging as a hidden bottleneck in the US rare earth magnet supply chain as new defense sourcing rules approach. Houston-based Hertha Metals plans to build a 10,000 t/yr plant in Texas to produce high-purity iron used in neodymium-iron-boron permanent magnets.

The project targets a less visible vulnerability in magnet manufacturing. US policy has focused heavily on rare earth elements such as neodymium and praseodymium, but NdFeB magnets also require high-purity iron. Hertha Metals says about 90% of this material is currently produced in China.

The timing is strategically important. Updated Defense Federal Acquisition Regulations are set to take effect on 1 January 2027, restricting Chinese-origin rare earth magnets and constituent materials in covered US defense systems. That rule could force defense contractors, magnet makers and upstream material suppliers to rebuild supply chains around non-China sources.

Hertha Metals plans to break ground later this summer. The company says its Texas plant will become the first domestic producer of high-purity iron for this application, positioning the project at the intersection of magnet security, steelmaking technology and US industrial policy.

DFARS Rules Put Magnet Inputs Under Supply Chain Pressure

The 2027 DFARS deadline changes the strategic value of upstream magnet materials. Compliance will not depend only on where final magnets are assembled. It will also depend on the origin of constituent materials used in defense-related systems.

This creates a direct opportunity for domestic high-purity iron. NdFeB magnets require neodymium, praseodymium and often dysprosium or terbium for performance, but iron remains the major base component. If high-purity iron remains China-dependent, US magnet supply chains could still face compliance risk even if rare earth oxides or metals are sourced elsewhere.

Hertha Metals is trying to address that gap with its FLEXHERS process, short for flexible fuel hydrogen electric reduction smelting. The process combines electric arc furnace technology with natural gas or hydrogen to produce iron and steel.

The company says the technology can use lower-grade ores and iron ore fines that are difficult to process economically through conventional blast furnace routes. This could widen the domestic feedstock base and reduce dependence on imported high-purity iron.

Hertha currently operates a one-tonne-per-day demonstration plant in Conroe, Texas. It describes the site as the largest demonstration-scale single-step steelmaking facility in the US. Ore is sourced domestically from Minnesota, and the pilot facility is already producing material that meets customer specifications.

The planned high-purity iron facility will also produce trial steel products. Hertha sees the project as a stepping stone toward broader iron and steelmaking capacity, with a target of reaching roughly 500,000 t/yr of production within four to five years.

Cost competitiveness will be critical. Hertha says it does not plan to rely on a domestic supply premium. Instead, it aims to compete economically by replacing metallurgical coal with natural gas and electricity while using lower-cost ore feedstocks.

This claim matters because strategic materials projects often struggle when policy support is stronger than market economics. If Hertha can produce competitively without relying on premium pricing, the company could build a more durable position in both defense and commercial supply chains.

Hertha Metals CEO Laureen Meroueh

Domestic Iron Production Links Magnets, Electrical Steel and Clean Manufacturing

High-purity iron has strategic importance beyond NdFeB magnets. The material can also support electrical steel used in transformers, electric vehicle motors and other electromagnetic applications. These sectors are becoming more important as grid investment, electrification and domestic manufacturing policy expand.

The project also fits a wider shift in iron and steel markets. Traditional blast furnace production depends heavily on metallurgical coal and higher-emission processing routes. Meanwhile, demand for higher-grade iron inputs suitable for lower-carbon steelmaking is expected to rise as producers shift toward cleaner technologies.

Hertha’s process aims to sit inside that transition. By using electricity, natural gas or hydrogen, the company is positioning FLEXHERS as a lower-carbon alternative to legacy ironmaking. The ability to process lower-grade ore and fines could also help revive domestic iron production without requiring only premium feedstocks.

The US steel industry has increasingly focused on scrap-fed electric arc furnaces. That model supports recycling and lower emissions, but it does not fully solve domestic iron supply for high-purity applications. Magnets, electrical steel and advanced components often need controlled chemistry that scrap alone cannot easily provide.

This is where Hertha’s strategy becomes industrially relevant. The company is not only proposing another steel plant. It is targeting a specific materials gap between critical minerals policy, rare earth magnet manufacturing and advanced steelmaking.

Competition from subsidized overseas producers remains a risk. Hertha says it can compete on cost, but Chinese industrial support and below-cost exports could still challenge domestic producers. This is why policy, procurement rules and long-term customer commitments may become important even if the production technology works.

The company has not disclosed financing details, future fundraising plans or offtake agreements. That leaves open questions about capital structure, customer readiness and the pace of commercial scale-up. However, the 2027 DFARS deadline gives the project a clear market catalyst.

The broader implication is that rare earth magnet supply security cannot be solved by rare earth mining alone. The full chain includes ore, separation, metal conversion, alloying, magnet manufacturing and supporting inputs such as high-purity iron. Any weak link can create dependence.

Hertha Metals is betting that the next phase of US critical materials policy will recognise that reality. If the company can scale production, secure customers and maintain cost discipline, high-purity iron could become a small but essential piece of the domestic magnet supply chain.

The Metalnomist Commentary

Hertha Metals highlights a critical point often missed in rare earth policy: magnet security depends on more than rare earths. High-purity iron, electrical steel and alloy inputs will become strategic materials if US defense and electrification supply chains must move away from China.

Ascend Elements Bankruptcy Exposes Pressure in Battery Recycling Market

Ascend Elements

Ascend Elements bankruptcy filing shows how difficult the battery recycling business has become as electric vehicle adoption slows in the US and Europe. The US battery recycler has filed for Chapter 11 bankruptcy and will use the court-supervised process to restructure liabilities while continuing normal operations.

Ascend Elements bankruptcy comes despite major commercial and government-backed support. The company said it had secured more than $2bn in commercial agreements and a $320mn grant from Poland, but these were not enough to overcome longstanding financial issues and outstanding liabilities.

The filing highlights a broader weakness in the battery recycling sector. Recyclers need steady end-of-life battery and production scrap feedstock, but slower EV growth has limited available material and made it harder to sell recovered products into battery supply chains.

Funding and Offtake Deals Failed to Offset Financial Pressure

Ascend had previously planned to develop cathode active material production in Hopkinsville, Kentucky. However, the company and the US Department of Energy agreed in March 2025 to cancel a $164mn grant for that project.

The company later received a $320mn grant from Poland in May 2025 to build a precursor cathode active material plant. That support showed continued policy interest in battery materials localization, especially in Europe.

Ascend also signed a five-year offtake agreement to supply Trafigura with 15,000t of lithium carbonate from 2027 to 2031. The agreement gave the company a future sales channel, but it did not solve its immediate balance-sheet pressure.

Slower EV Growth Weakens Recycling Economics

Ascend Elements bankruptcy reflects the timing problem facing battery recyclers. Many business models were built around rapid EV growth, rising battery scrap availability and strong demand for recycled lithium, nickel, cobalt and cathode materials.

But slower EV adoption has delayed feedstock growth and reduced market confidence. Without sufficient input material and reliable downstream demand, recyclers can struggle to operate at the scale needed to justify large processing and materials investments.

The pressure is not limited to Ascend. Texas-based recycler Ecobat is selling assets in the UK, France, Italy, Germany and Austria to focus on North America, showing that consolidation and retrenchment are spreading across the sector.

The Metalnomist Commentary

Ascend Elements bankruptcy shows that battery recycling is strategically important but commercially unforgiving. The winners will be companies with secured feedstock, disciplined capital spending and customers ready to buy recycled battery materials at scale.