Defense Industry Under Stress: Bottlenecks at Rheinmetall and Lockheed – Almonty Industries Stands to Reap the Benefits

Lockheed Martin and the Production Dilemma

The US defense giant Lockheed Martin exemplifies the industry's current scaling crisis. Although order books are bursting at the seams due to the sharp rise in demand, the production of highly complex weapons systems cannot be accelerated at will. In the first weeks of the Iran conflict, the US military fired hundreds of Tomahawk and JASSM guided missiles to neutralize enemy positions deep inside the country. However, the production of these systems lags far behind the enormous consumption. The annual production rate for complex Tomahawk cruise missiles is just over 100 units, while approximately 500 JASSM missiles are manufactured each year. Even with an immediate shift to full crisis mode and heavy government investment in manufacturing facilities, it would take years to increase output significantly. Trump himself, after initially claiming that American arsenals were inexhaustible, had to admit that stocks of such high-end systems are dangerously low.

Rheinmetall Reaches Its Limits

In Europe, Rheinmetall faces identical challenges. While the German defense contractor is reaping enormous financial benefits from the military turning point and the historically high defense budgets of European NATO countries, it is hitting the hard limits of its supply chains in operational terms. Rheinmetall is particularly reliant on a steady supply of special metals and chemical precursors for the production of standardized 155mm artillery ammunition, which is consumed in vast quantities on modern battlefields. The large-scale capacity expansions at European plants can only deliver the desired quantities if supply security for raw materials is fully guaranteed. This is precisely where the weak point of the entire Western defense alliance lies: decades of dependence on suppliers from Asian regions make the European defense industry extremely vulnerable to geopolitical upheavals. Without a secure supply of raw materials, production lines at Rheinmetall risk grinding to a halt.

Tungsten: The Irreplaceable Bottleneck

At the very heart of this raw materials crisis lies the transition metal tungsten, which is characterized by the highest melting point of any pure metal and a high physical density. Tungsten is essential for modern warfare, as it is used in armor-piercing ammunition, high-temperature-resistant rocket engines, turbine blades, and the electronics of guided missiles, and is often irreplaceable. The strategic problem facing the Western world lies in massive market concentration: China currently controls over 80% of global tungsten production and simultaneously dominates the downstream processing chain. The United States itself has not had any commercial tungsten production of its own for years. As the government in Beijing increasingly instrumentalizes the export of critical minerals as a geopolitical lever and significantly tightens export controls on dual-use goods, the Western defense industry faces a massive procurement problem. An imposed ban on tungsten supplies would quickly restrict production at companies like Lockheed Martin and Rheinmetall and ultimately bring them to a standstill.

Almonty Industries Secures Western Supply

In this highly volatile geopolitical environment, Almonty Industries is positioning itself as virtually the only independent supplier of Western tungsten. The company is currently reactivating the historic Sangdong mine in South Korea, which has now reached the transition to commercial production following the completion of the first construction phase. Geologically, Sangdong is considered one of the largest and highest-quality tungsten deposits in the world. Once full production capacity is reached, Almonty Industries is estimated to be able to meet approximately 40% of total non-Chinese tungsten demand in the future. The company's management has wisely leveraged this exceptional strategic position to secure long-term off-take agreements with established industry leaders, making future cash flows highly predictable for years to come.

On the capital market, Almonty's stock recently experienced a price setback amid high market volatility, which now opens an extremely attractive entry window for strategically oriented investors. Analysts at B. Riley Financial have recently raised the price target for the stock to USD 23.00. Investors find in Almonty a unique opportunity to invest specifically in the bottleneck of the defense industry and to benefit disproportionately from the inevitable realignment of the global security architecture.