Tungsten crisis hits defense boom: Why Almonty Industries, Rheinmetall, and RENK Group stand to benefit

Almonty Industries – Why this critical raw material is in focus

By now, every investor should be aware that the high-tech and defense industries are heavily dependent on strategic metals. Tungsten is at the top of the list with properties that hardly any other material can offer. However, over 80% of global production comes from China. This concentration creates risks, but also opportunities for alternative suppliers. It is here where Almonty Industries comes in. The Company is positioning itself as a Western supplier in a market that is currently gaining enormous geopolitical importance. This is no coincidence, as tungsten is one of NATO's twelve most critical raw materials.

Almonty can build on two strong pillars. The Panasqueira mine in Portugal, which has been in operation for over 135 years, already supplies high-quality concentrate and cash flow. However, the flagship project is the Sangdong mine in South Korea, one of the largest and highest-grade tungsten deposits outside China. Production is set to begin in the coming months and will initially quadruple the capacity compared to Portugal. A second expansion phase is planned to double output again by 2027. But Almonty is thinking further ahead and plans to build its own oxide refinery in Korea to move up the value chain. In addition, the Sangdong license offers significant molybdenum deposits, with production scheduled to start by the end of 2027. A long-term offtake partner has already been secured for this.

What sets Almonty apart is its high sales security. For Sangdong, 90% of the tungsten concentrate is tied to large industrial customers on a long-term basis, including a price floor with no upside potential. All future molybdenum is also contractually secured. Part of the planned oxide will go exclusively to a US defense supplier. This focus on secure supply chains is very much in tune with the spirit of the times. By relocating its headquarters to the US, Almonty has deliberately positioned itself as a non-Chinese, transparent source. Export restrictions from China and new procurement rules in Western countries, for example, for the defense industry, are massively reinforcing this trend. Research firm D.A. Davidson has published a new study and set a price target of USD 7.00. The share is currently trading at USD 4.15 on the NASDAQ.

Rheinmetall – Ahead of quarterly figures

Rheinmetall got off to a flying start in 2025. The first quarter saw a 46% jump in revenue to EUR 2.3 billion and an operating profit of EUR 199 million, representing a 49% increase. The fundamentals remain solid, with a record order backlog of EUR 55 billion securing capacity utilization for the coming years. The dividend increase to EUR 8.10 per share underscores management's confidence in the Company's robust earnings power. For the full year, the Group is aiming for revenue growth of 25-30%. Its position as Europe's leading defense company is solid, even if the political environment must be monitored closely.

The summer brought further momentum. Several major orders were secured in July, including artillery ammunition worth several hundred million euros for a NATO country and infantry ammunition for Lithuania and Estonia. At the same time, Rheinmetall is expanding rapidly, particularly in Romania. A local production network for the Lynx infantry fighting vehicle and ammunition is being established there, creating value locally. Another milestone is the successful initial test of the new GMARS rocket launcher in cooperation with Lockheed Martin. The system offers twice the firepower of its predecessors and could generate significant orders in the long term. In addition, an order for over 1,000 logistics vehicles worth EUR 770 million was recently placed by the German Armed Forces.

Despite the strong order situation, there are critical issues. Ahead of the Q2 figures on August 8, the market is discussing possible margin pressure points, especially in the highly profitable ammunition business. Analysts consider the current annual forecast of a 15.5% EBIT margin to be ambitious. Strategically, the focus on the core defense business remains central. A possible exit from parts of the civil propulsion technology business and the review of acquisitions such as Iveco's military division are intended to sharpen the portfolio. For investors, the long-term capacity expansion strategy and a resilient outlook after the summer break are crucial to justify the high valuation level. The share price is trending sideways and currently stands at EUR 1,756.00.

RENK Group – Focusing on India and future technologies

With its new factory in Shoolagiri, India, RENK is massively expanding its presence in one of the hottest growth markets. The plant produces drive solutions directly on site for India's defense programs, such as the Arjun tank, but also for industrial partners. The "local-for-local" strategy reduces costs, speeds up delivery times, and catapults RENK into a key partner for India's modernization plans. At the same time, "local-for-global" manufacturing strengthens the global network. This is a clear commitment to the location, which should score points both politically and economically.

NATO partners are currently demonstrating their confidence in RENK's core technology. Latvia has ordered 84 HSWL-256B transmissions for armored personnel carriers after the robust system impressed the British Army. The deal consolidates RENK's position as a critical supplier to Western armed forces. This is not an isolated case, as new international customers for proven drive solutions are a growing trend. RENK is skillfully exploiting the high demand for military security technology without being dependent on individual crises.

RENK is shaping the future with ARX Robotics. The partnership is aimed at software-controlled military vehicles, such as unmanned ground vehicles (UGVs). RENK is contributing its drive expertise and global production capacity, while ARX is contributing its AI operating system, Mithra OS. The joint goal is to digitally upgrade existing vehicle fleets and develop new autonomous platforms. The focus markets are the US, Europe, India, and the Middle East. This is a strategic move to set early standards in the rapidly growing segment for autonomous defense technology. A share currently costs EUR 68.02.

Geopolitical upheavals are forcing the global economy to strategically realign itself, particularly with regard to critical raw materials and defense technologies. Almonty Industries is positioning itself as an indispensable, non-Chinese tungsten supplier for the West, backed by the high-grade Sangdong mine and long-term offtake agreements. Rheinmetall, Europe's leading defense company, is benefiting from exploding demand, record orders, and operational growth, despite observed margin risks. The RENK Group is focusing on local production in key markets such as India and future technologies such as autonomous military systems with ARX Robotics. All three companies embody responses to a fragmented world order, with a clear focus on resilience, innovation, and security.