Key Takeaways:
Supply gap: U.S. has not mined scandium since 1969. Rio Tinto is the only North American producer at ~9 tonnes/year. U.S. imports more than half of its germanium needs.
Lockheed Martin is negotiating 15 metric tons of annual scandium supply from NioCorp's Nebraska mine as Trump pressures defense contractors off Chinese minerals.
"Both companies recognize how important scandium has become to the future of American defense technology," Mark Smith, NioCorp's CEO, said.
The preliminary agreement would cover roughly a quarter of global scandium demand, which the U.S. Geological Survey estimates at about 60 metric tons and rising. The U.S. has not mined scandium since 1969, and Rio Tinto is the only North American producer with capacity of about nine metric tons annually. NioCorp's Nebraska mine is slated to open by 2028 with annual production of 100 metric tons.
The deals come as Trump's July executive order makes it harder for defense contractors to obtain waivers that long allowed purchases from China and other prohibited suppliers. The U.S. imports more than half of its germanium needs, and domestic mining and processing capacity remains limited even as dozens of critical mineral projects are under development.
Lockheed is separately in talks with Teck Resources and Quebec-based 5N Plus for germanium, used in infrared sensors and missile guidance systems. Teck produces a zinc and germanium concentrate from its Red Dog mine in Alaska, smelted in British Columbia. The company calls itself the largest North American germanium producer and fourth-largest globally, with USGS estimating global consumption at roughly 60 metric tons annually.
Negotiations with both Teck and 5N Plus have continued for more than a year, with pricing and contract length as sticking points, according to a source familiar with the discussions. 5N Plus received Pentagon funding earlier this year to process germanium from recycled feedstock in Utah.
"What Lockheed basically wants is a long-term supply chain security," the source said. "Because they are under pressure, so they really want to know if the supply is coming from China or elsewhere."
The news triggered a rally in U.S. critical minerals stocks, with USA Rare Earth (USAR) rising more than 9 percent intraday. Lockheed shares traded marginally higher, having gained 22 percent this year and 39 percent over the past 12 months.
The deals reflect a broader shift as Trump's administration pushes defense contractors to support U.S. mines with long-term supply agreements. The 2027 deadline for defense contractors to avoid Chinese critical minerals remains a challenge: Chinese suppliers have historically offered cheaper prices, and U.S. mining and processing capacity is still catching up. Industry estimates suggest U.S.-sourced alternatives could cost 30 to 50 percent more.
Lockheed, which produces the F-35 Lightning II fighter jet and Patriot interceptor missiles, recently secured a $53.86 billion seven-year contract for PAC-3 missile systems. Northrop Grumman also won a $3 billion contract to work with Lockheed on missile component production.
This article is for informational purposes only and does not constitute investment advice.
