Supply Shock: Why Defense Capital Is Rotating From Exploration to Infrastructure
VANCOUVER, British Columbia, Jan. 20, 2026 (GLOBE NEWSWIRE) -- Equity Insider News Commentary – North American markets have identified a structural failure: The United States can dig for minerals, but it cannot refine them[1]. This disconnection is no longer a logistical oversight; it is a classified national security vulnerability triggering immediate federal intervention. Washington is now aggressively underwriting infrastructure to bypass outdated refining methods[2], marking 2026 as the year valuation models shift from simple extraction to execution-ready processing platforms. This transition is driving institutional flows into Ares Strategic Mining Inc. (CSE:ARS) (OTCQX:ARSMF), Energy Fuels (NYSE:UUUU) (TSX:EFR), Electra Battery Materials (NASDAQ:ELBM) (TSXV:ELBM), Aclara Resources (TSX:ARA) (OTCID:ARAAF), and Denison Mines (NYSE-A: DNN) (TSX:DML).
The catalyst is energy economics. As AI data centers absorb available baseload power, electricity costs are becoming the defining constraint for heavy industry[2]. This energy inflation creates an immediate competitive moat for streamlined processing operations that can minimize input costs while delivering commercial-scale throughput. In this environment, the market is re-rating assets based on their ability to secure power and deploy efficient processing technology, favoring immediate production capabilities over distant exploration upside.
Ares Strategic Mining (CSE:ARS) (OTCQX:ARSMF) has been awarded a Pentagon contract to supply acid-grade fluorspar to the U.S. Department of Defense. The multi-year deal carries an initial value of $169 million, with potential task orders reaching $250 million over five years through an Indefinite Delivery/Indefinite Quantity agreement. The contract establishes Ares as the sole domestic supplier of acidspar to the U.S. government, supporting the replenishment of strategic mineral stockpiles.
"This is the kind of contract that transforms companies, and secures the future of U.S. industry," said James Walker, CEO of Ares Strategic Mining. "We're not just producing fluorspar; we're helping build a more resilient and secure domestic supply chain for critical minerals."
The contract addresses a significant supply chain vulnerability. The United States currently imports 100% of its fluorspar, a critical mineral used in steel production, lithium-ion batteries, semiconductors, defense systems, and nuclear fuel development. Ares operates the Lost Sheep mine in Utah, the only permitted fluorspar operation in the United States.
Recent operational progress supports the production timeline. In December, Ares completed major infrastructure work at both its underground mine and Delta, Utah processing facility.
The company completed the installation of its ramp and adit system to intersect giant, high-grade, fluorspar orebodies, and advanced construction at its processing plant where foundations and the assembly of the mechanical plant components was completed, as well as digging out the ponds. The Company is in the final stages of fitting the electrics and Control and Instrumentation systems to the assembled plant to enable first production and the commencement of the manufacturing operation.
The company is building two plants that will produce both metallurgical-grade and acid-grade fluorspar, with an initial production output of 50,000 tons per year, which has the potential to be increased with the installation of additional ramps at Ares' district scale fluorspar project.
In November, the company completed its secondary ventilation system, meeting the final regulatory requirement for industrial-scale operations. The 75-horsepower system delivers 30,000 cubic feet per minute of airflow in compliance with Mine Safety and Health Administration standards.
Financing has proceeded through non-dilutive structures. Ares closed its LIFE offering in October, raising $10.5 million total. Sharing agreements with UK firm Sorbie Bornholm delivered approximately $3.66 million in additional capital through hedging arrangements tied to the company's share price performance. The structure has delivered returns of 180% and 266% on Sorbie's initial $1 million investment without issuing new shares, with funds accelerating construction of the Acidspar Flotation Plant.
The Lost Sheep project encompasses 5,982 acres across 353 claims in Juab County, Utah. Beyond fluorspar, the company has identified germanium and gallium in its ore through a research partnership with Iowa State University and Ames National Laboratory. Both minerals appear on U.S. critical supply risk lists, and gallium has not been produced domestically since 1987.
CONTINUED… Read this and more news for Ares Strategic Mining at: https://usanewsgroup.com/2024/04/29/this-company-is-bringing-essential-mining-back-to-the-u-s-fueled-by-government-action/
In other industry developments and happenings in the market include:
Energy Fuels (NYSE:UUUU) (TSX:EFR) released results of a Bankable Feasibility Study for its Phase 2 rare earth processing expansion at the White Mesa Mill in Utah, confirming capital costs of $410 million and after-tax NPV of $1.9 billion with a 33% IRR. The expansion will increase the Mill's production capability from roughly 1,000 tonnes per annum NdPr oxide to over 6,000 tonnes annually along with approximately 66 tonnes of terbium and 240 tonnes of dysprosium.
"Energy Fuels is on the cusp of solving America's rare earth processing 'bottleneck'," said Mark S. Chalmers, CEO of Energy Fuels. "With an estimated capital cost of $410 million for the Phase 2 Circuit and an estimated all-in production cost of $29.39 per kilogram NdPr equivalent produced from our Vara Mada project, we believe our REE oxide production ranks among the lowest capital and operating costs globally."
The Phase 2 Circuit is expected to produce $311 million of average annual EBITDA over the first 15 years and positions Energy Fuels to supply approximately 45% of total U.S. rare earth requirements. Regulatory approval is expected by mid-2027 with commissioning planned for Q1 2029.
Electra Battery Materials (NASDAQ:ELBM) (TSXV:ELBM) provided an update on construction progress at North America's first cobalt sulfate refinery with recent completion of exterior pipe rack installation connecting the leach plant, solvent extraction building, and crystallizer. Current site work is centered on civil, structural, concrete and tankage installation with procurement and contracting activities progressing as key suppliers and contractors are engaged to support detailed execution planning.
"Momentum continues to build across the project," said Paolo Toscano, VP Projects and Engineering of Electra Battery Materials. "Strong planning and close collaboration with our partners are translating into tangible progress on the ground."
With construction financing and permits in place and the majority of long-lead equipment secured, current efforts are centered on sequencing work and preparing for integration and installation of the refinery's mechanical systems. Electra Battery Materials is targeting 2027 commissioning for the facility which is expected to produce battery-grade cobalt supporting supply reliability for North American markets.
Aclara Resources (TSX:ARA) (OTCID: ARAAF) has entered into a Cooperative Research and Development Agreement with Argonne National Laboratory, a U.S. Department of Energy national laboratory, to develop an artificial intelligence-enabled digital twin for the company's heavy rare earth separation process. Under the agreement, Aclara and Argonne will leverage Argonne's SolventX modeling platform along with leadership in advanced computing, process modeling and artificial intelligence, incorporating Aclara's proprietary pilot-scale data to develop a high-fidelity digital representation of the separation process.
"This collaboration with Argonne represents a significant step forward in our strategy to deploy a world-class, digitally enabled rare earth separation platform in the United States," said Hugh Broadhurst, Chief Operating Officer of Aclara Resources. "By combining our proprietary separation process and pilot-scale data with Argonne's world-class capabilities in advanced computing and artificial intelligence, we expect to accelerate industrial ramp-up, improve efficiency, and further de-risk execution."
The digital twin will enable advanced simulation, optimization and predictive control of heavy rare earth solvent extraction operations. This collaboration builds on Aclara's ongoing development of a Rare Earth Separation Pilot Plant in partnership with Virginia Tech, expected to be inaugurated in March 2026.
Denison Mines (NYSE-A: DNN) (TSX:DML) announced that grid power supply from Saskatchewan Power Corporation is available at the site of the future Phoenix in-situ recovery uranium mine following installation of a new 138kV transmission line. The availability of grid power represents a significant step in de-risking project execution as electrification of the site is on the critical path of construction activities and supports establishment of the freeze wall planned to surround the initial mining area.
"We thank SaskPower for the safe installation of the new high-voltage transmission line, on schedule and on budget," said David Cates, President & CEO of Denison Mines. "As power is a crucial component of planned site infrastructure for Project construction and future operation, the availability of grid power supply at the site represents a major Project milestone."
The new transmission line is approximately six kilometers in length and connects to the existing 138kV line near Russell Lake. Denison Mines has obtained access to up to 8.8 megawatts of power under a five-year agreement with commencement of construction activities remaining subject to final regulatory approvals and final investment decision.
Article Source: https://usanewsgroup.com/2024/04/29/this-company-is-bringing-essential-mining-back-to-the-u-s-fueled-by-government-action/
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SOURCES:
- https://www.whitehouse.gov/presidential-actions/2026/01/adjusting-imports-of-processed-critical-minerals-and-their-derivative-products-into-the-united-states/
- https://www.mining.com/how-2026-will-reshape-the-us-critical-mineral-resilience/
