A preliminary scandium supply agreement between Lockheed Martin and NioCorp is indicative of a broader transformation underway in the U.S. defense industrial base. As Washington tightens restrictions on reliance on Chinese critical minerals, American defense and mining companies are going to have to accelerate efforts to build domestic and allied supply chains for materials essential to next-generation weapons, exposing both the opportunities and the significant challenges that lie ahead.
Earlier this month, Lockheed Martin signed a preliminary agreement with U.S. critical minerals developer NioCorp Developments to purchase up to 15 metric tonnes of scandium oxide annually for a decade, marking another step in Washington’s drive to build domestic supply chains for strategic minerals used in advanced defense systems.
The non-binding memorandum of understanding (MOU), announced on August 4th, would see NioCorp supply scandium either as oxide or in aluminum-scandium alloy form from its proposed Elk Creek Critical Minerals Project in Nebraska once commercial production begins.
The companies said the agreement builds on their existing Pentagon-backed collaboration to develop aluminum-scandium alloy components for advanced fighter aircraft. The collaboration, launched in October 2025, is backed by a US$ 10 million loan that the U.S. Department of Defense awarded to NioCorp subsidiary Elk Creek Resources under the Defense Production Act to help establish a domestic scandium mine-to-master-alloy supply chain.
If converted into a definitive supply agreement, the proposed volumes would account for roughly 15% of NioCorp’s planned annual scandium oxide production of about 100 tonnes and represent around one-quarter of current estimated global scandium demand, highlighting the strategic importance of the deal.
Per the reports, the Elk Creek mine is expected to begin production around 2028, subject to financing and construction.
Scandium is among the world’s most sought-after critical minerals because small additions to aluminum significantly improve strength, corrosion resistance and weldability while reducing weight. These characteristics make aluminum-scandium alloys attractive for military aircraft, missiles, spacecraft, additive manufacturing and other high-performance defense applications.
The agreement comes as the United States seeks to reduce dependence on overseas suppliers of critical minerals, particularly China. Reuters reported that President Donald Trump recently intensified efforts to encourage defense contractors to source strategic minerals domestically, making long-term supply agreements increasingly important for new U.S. mining projects.
NioCorp has positioned Elk Creek as a cornerstone of that strategy. Besides scandium, the Nebraska project is designed to produce niobium and titanium while also evaluating the recovery of several rare earth elements.
According to NioCorp, the latest agreement supports efforts to establish what it describes as America’s first integrated “scandium-to-warfighter” supply chain. The company already produces aluminum-scandium master alloy using externally sourced scandium oxide and intends to manufacture finished alloy ingots from Elk Creek production for both defense and commercial customers.
The announcement also reflects broader changes across the global critical minerals market. China, Russia and Ukraine have historically dominated scandium supply, while the United States has not operated a primary scandium mine since 1969. Although Rio Tinto produces limited scandium in North America from titanium processing operations, domestic supply remains constrained, increasing the strategic significance of new U.S. production capacity.
Other than that, Lockheed is also negotiating germanium supplies with Teck Resources, which produces the metal as a byproduct at its Red Dog zinc mine in Alaska, and with Quebec-based 5N Plus, which has Pentagon support for processing recycled feedstock in Utah. Germanium is critical for infrared sensors and optics. Those talks have run for more than a year, sources familiar with the matter said, with pricing and contract length still under discussion.
For Lockheed Martin, whose portfolio includes the F-35 Lightning II fighter, Patriot missile systems and other advanced defense platforms, securing long-term access to domestically sourced critical minerals could help strengthen supply chain resilience as geopolitical competition over strategic resources continues to intensify.
Also, in October 2025, Lockheed secured an option from Australia’s Sunrise Energy Metals for up to 15 tonnes a year of scandium oxide—about 25% of planned output—from the Syerston project over the first five years of production. That deal followed a U.S.-Australia critical minerals pact.
These steps indicate an imminent shift within the U.S. defense industry toward domestic and allied mineral supplies. The change has gathered pace since mid-to-late 2025, driven by China’s export licensing controls on rare earths and related materials, a statutory deadline requiring China-free rare-earth magnets in defense systems by January 1st, 2027, and intensified pressure from the Trump administration.
Other major contractors—RTX (Raytheon), Northrop Grumman, Boeing Defense and General Dynamics—face the same 2027 compliance pressure and China-related risks, hence, more such announcements from other U.S. defense industry participants should be expected in the months to come.
Washington’s policy push intensified further in July 2026, when President Donald Trump signed an executive order making it substantially more difficult for defense contractors to obtain waivers allowing purchases of critical minerals from China and other prohibited foreign suppliers.
Under the new rules, contractors seeking waivers must demonstrate that they searched for alternative suppliers, disclose the origins of their materials, and present plans to reduce dependence on restricted sources. Companies failing to comply could face procurement consequences, including losing eligibility for future government contracts. The order also directs the Pentagon to map lower-tier suppliers across the defense industrial base and identify vulnerabilities arising from foreign ownership or dependence on overseas processing.
The executive order followed broader Pentagon efforts to identify vulnerabilities buried deep within defense supply chains. In March, the U.S. military sought fresh domestic supplies of 13 critical minerals used in semiconductors, weapons systems and other defense applications, highlighting growing concerns over supply security amid the conflict in the Middle East.
This policy shift is also driving investment across the wider U.S. critical minerals sector.
For instance, Phoenix Tailings, a Massachusetts-based company developing rare earth processing technology, recently secured a US$ 500 million Pentagon loan to expand production. The company aims to increase output from approximately 440 pounds per year currently to about 120 tons annually by 2028, supplying materials used in systems including Tomahawk cruise missiles and Terminal High Altitude Area Defense (THAAD) interceptors.
In July 2025, the U.S. Defense Department took a roughly 15% stake in MP Materials, operator of the only active U.S. rare-earth mine at Mountain Pass, California, and committed to a 10-year offtake of magnets from a new facility, a price floor for neodymium-praseodymium, and financing for heavy rare-earth separation.
In June 2026, the U.S. Army conditionally awarded leases for commercial processing plants on military bases for graphite, lithium, boron and heavy rare earths, with operations targeted for 2027-2028. The U.S. Office of Strategic Capital has extended conditional loans to firms including United States Antimony and Energy Fuels.
This Foresight Is Why You Should Make Unraavelling Geopolitics Your Preferred Source
This is a fairly new, independent geopolitical website run by one person. Building an audience takes time, and lower traffic significantly constrains the site’s ability to generate the advertising revenue needed to keep it going.
So, if you like this article, please enable notifications by pressing the button below. Your support helps grow this website and sustain its unbiased and well-researched coverage on global geopolitical risks and opportunities.
That said, the U.S.’ domestic capacity remains insufficient for several minerals, and pure commercial offtakes are difficult because defense demand is a tiny fraction of global markets; therefore, replacing China’s dominant position will require years, as it controls much of the world’s processing capacity for rare earth elements and maintains a leading position in refining several strategic minerals.
Reuters reported in July that despite federal investments worth tens of billions of dollars across nearly 150 companies, U.S. domestic production remains well below expected demand. Analysts have warned that achieving complete independence from Chinese supply chains before the administration’s January 1st, 2027, target will be difficult because the United States still lacks sufficient mining, refining, and magnet manufacturing capacity for several critical minerals.
Meanwhile, Arnold Magnetic Technologies, the largest magnet manufacturer in the U.S., has begun sourcing rare-earth materials from France and other allied suppliers as manufacturers seek alternatives to Chinese processing, while other companies continue investing in domestic refining and magnet manufacturing capacity. Also, Australia’s Lynas has advanced a preliminary multi-year supply framework with the Pentagon that includes price floors.
Tanmay Kadam is a geopolitical observer based in India. He has experience working as a Defence and International Affairs journalist for EurAsian Times. He can be contacted at tanmaykadam700@gmail.com.