Lockheed nears domestic scandium, germanium deals after EO tightens waivers
The talks are real, but the mines aren't online yet, pricing is unresolved, and China still dominates both markets.
TL;DR
Lockheed Martin is negotiating domestic supply deals for scandium with Colorado-based NioCorp Developments and germanium with Teck Resources and 5N Plus, according to sources familiar with the talks. The moves follow Trump's July executive order making it harder for defense contractors to obtain waivers for Chinese critical minerals. NioCorp has signed a preliminary deal for 15 metric tons of scandium annually from a Nebraska mine that won't open until 2028. The germanium negotiations, now past the one-year mark, remain unresolved on pricing and contract length.
Lockheed Martin is negotiating to buy scandium and germanium from U.S. and Canadian mines, two sources told Reuters, as the administration's July executive order forces defense contractors to replace the Chinese suppliers they've relied on for decades.
The EO (which White House adviser Peter Navarro distilled as "no more: 'we tried nothing and we're out of options'") requires contractors seeking waivers to prove they searched for alternatives and to lay out a transition plan. It also directs the Pentagon to map critical defense supply chains from raw materials through finished weapons systems. Lockheed, which builds the F-35, Patriot interceptors, and Javelin missiles, is the first major prime to show its work publicly.
The scandium track is the more advanced of the two. NioCorp Developments has signed a preliminary deal to supply 15 metric tons per year (roughly a quarter of global demand) from its Elk Creek, Nebraska site, slated to open by 2028. The U.S. hasn't mined scandium domestically since 1969. The metal is used in lightweight, corrosion-resistant alloys for aircraft. NioCorp and Lockheed already collaborate under a Pentagon-funded research program, and the preliminary agreement would need to be finalized before the mine comes online.
The germanium track is less settled. Lockheed is in talks with Teck Resources, which produces a zinc-germanium concentrate at its Red Dog mine in Alaska, and with Quebec-based 5N Plus, which received Pentagon funding earlier this year to process germanium from recycled feedstock in Utah. Germanium is critical for infrared sensors and other military optics. Those negotiations have been running for more than a year with pricing and contract length unresolved, the second source said.
The gap between the EO's demands and domestic production capacity remains wide. NioCorp's mine won't deliver metal for at least two years. 5N Plus needs to stand up processing in Utah. Teck doesn't break out germanium production separately, and the U.S. still imports more than half its germanium needs. For now, Lockheed is placing bets on mines that aren't yet producing, which is what the EO ordered, but also a reminder of how much supply-chain reality lags behind executive-branch deadlines.
Published ·Deep Fathom