United States Antimony (NYSEAMERICAN:UAMY) has secured a US$245 million sole-source contract from the US Defense Logistics Agency to supply antimony ingots.
The five year ‘indefinite delivery indefinite quantity’ agreement was finalized after months of negotiations and makes US Antimony the exclusive supplier of antimony ingots to the National Defense Stockpile.
The company confirmed that first deliveries are expected this week. News of the award sent its shares up 17.8 percent in New York trading, boosting its market value to about US$975 million.
“This is the kind of knowledge that is only gained through decades of execution and know-how,” Chairman and CEO Gary C. Evans said in the Tuesday (September 23) announcement. “USAC has some of the most experienced antimony chemists, metallurgists and other professionals on its team in the global landscape.”
Evans added that the expertise of Gus Gustavsen, the company’s antimony division president, was central to the award. Gustavsen has more than 50 years in the field.
Washington is moving to strengthen supply chains for materials considered essential to defense and energy security. China dominates global antimony production, leaving the US reliant on imports in recent years. By securing a sole-source deal, the Pentagon has effectively locked in a domestic pipeline for a mineral it deems strategically important.
US Antimony said it is working to broaden its ore supply beyond imports.
Mining began this month on its acreage in Alaska, where early results indicate high-grade deposits that could support efficient processing and eventually supply military-grade products, including antimony trisulfide.
The Alaska development marks a shift for US Antimony, which for decades has depended heavily on foreign ore. The company emphasized that many competing sources, both in the US and abroad, are unlikely to meet military standards and remain years away from commercial production.
“We don’t believe the low quality of those antimony ores controlled by others will meet the stringent requirements of our U.S. Military,” the company reaffirmed.
The US Geological Survey lists antimony as one of 50 minerals critical to national security and economic stability.
The Defense Logistics Agency has been tasked with replenishing the National Defense Stockpile, which in recent years has drawn down to its lowest levels since the Cold War.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.