NioCorp Developments (NASDAQ:NB) shares rose 17% on Tuesday after reports emerged that Lockheed Martin is in talks to secure supplies of critical minerals from U.S. operations amid a push by the U.S. government to reduce reliance on foreign sources.
According to two sources familiar with the discussions, the world’s largest defense contractor is negotiating with NioCorp for scandium supply and is also in talks with Teck Resources and 5N Plus for germanium. Both scandium and germanium are inputs used in military hardware, including aircraft components and infrared sensors.
A source familiar with the negotiations and documents reviewed by those sources said NioCorp has signed a preliminary agreement to provide Lockheed with 15 metric tons per year of scandium. That contracted volume would amount to roughly one-quarter of current global scandium demand - the U.S. Geological Survey estimates global demand at about 60 metric tons and rising.
NioCorp plans to produce the metal at its Nebraska mine, which is scheduled to open by 2028 and is projected to have annual production capacity of 100 metric tons. The arrangement with Lockheed would still require finalization, though the two companies already participate in a Pentagon-funded research program together.
Last month, the U.S. administration issued an executive order tightening the criteria for defense contractors to obtain waivers that previously allowed purchases of minerals from China and other restricted foreign suppliers. Lockheed is a major supplier of defense systems including the F-35 Lightning II fighter and Patriot interceptor missiles for the U.S. government.
Observers note the proposed deals represent a step toward establishing domestic mineral supply chains for defense needs, but significant obstacles remain. Chinese suppliers have historically been able to offer lower prices, and U.S. mining and processing capacity for these critical minerals remains limited.
Summary
Potential supply agreements between Lockheed Martin and U.S. miners have pushed NioCorp shares higher. The talks would involve significant volumes of scandium relative to current global demand and tie into wider policy moves to reduce reliance on certain foreign mineral sources.
What to watch
- Whether the preliminary agreement for 15 metric tons per year of scandium is finalized.
- Progress on bringing NioCorp’s Nebraska mine into production by 2028 at the planned 100 metric tons per year capacity.
- How U.S. mining and processing capacity and pricing dynamics affect the feasibility of domestic sourcing.