en.Wedoany.com Reported - Largo Inc. (TSX: LGO; Nasdaq: LGO) subsidiary Largo Resources USA Inc. has been awarded an Indefinite Delivery/Indefinite Quantity contract by the Strategic Materials Division of the U.S. Defense Logistics Agency to supply up to 2,876 metric tons of high-purity vanadium pentoxide (V₂O₅) to support the U.S. Defense Stockpile. The total contract value is capped at $125 million.
The five-year contract features a fixed-price structure, with the price per pound of V₂O₅ carrying a premium over the current benchmark V₂O₅ price index in 2026, followed by a 10% annual increase thereafter. The contract allows for delivery orders to be placed during the five-year ordering period, but the IDIQ structure does not guarantee a minimum purchase quantity, and actual order value may fall below the cap.
Following an extensive review, Largo has been established as a trusted supplier within the U.S. defense industrial base and critical materials ecosystem, granting the company access to the U.S. government and Department of Defense supply chain. This contract is part of the DoD's initiatives to strengthen the critical minerals supply chain and ensure long-term availability of strategic materials needed for defense readiness and industrial mobilization.
Largo's vanadium is produced at its Maracás Menchen mine and chemical plant in Bahia, Brazil, one of the highest-grade vanadium mines globally. The company produced 9,150 metric tons of V₂O₅ equivalent in 2025, with 2026 production guidance set at 10,500 to 12,000 metric tons of V₂O₅ equivalent. First-quarter 2026 production reached 2,616 metric tons, at the upper end of quarterly guidance.
Largo Executive Chairman and Co-Chief Executive Officer Alberto Arias stated that this contract validates the strategic importance of the company's vanadium supply platform, making Largo an integral part of the U.S. government's high-purity vanadium supply chain and supporting the DLA's efforts to strengthen diversified and allied supply chains for critical applications including aerospace, defense, energy storage, and specialty alloys.
Co-Chief Executive Officer Daniel Tellechea noted that the contract's fixed-price structure reflects the strategic value the U.S. government places on securing Western sources of high-purity vanadium pentoxide for defense applications, which will help improve the company's vanadium price realization and offset price weakness outside the U.S. as well as cost inflation from logistics disruptions.
Chief Commercial Officer Francesco D'Alessio pointed out that this contract demonstrates Largo's ability to meet the stringent technical and commercial requirements of defense procurement, further solidifying the company's position in key government stockpile programs.
The contract requires vanadium pentoxide to meet strict purity and quality standards set by the DLA, supporting aerospace-grade titanium alloys, advanced defense manufacturing, and emerging energy storage technologies. The DLA has noted that the number of qualified suppliers capable of meeting the program's technical, quality, and supply chain requirements is limited.
Largo also produces ilmenite as a byproduct during vanadium production and is evaluating the potential production of byproducts including copper, gold, platinum, palladium, and cobalt, many of which are classified as critical metals. Additionally, the company holds a 100% interest in the Northern Dancer tungsten-molybdenum project in Canada's Yukon Territory and a 100% interest in the Currais Novos tungsten tailings project in Brazil, and recently announced a review of strategic alternatives to maximize shareholder value.
Largo is strategically investing in the clean energy storage sector through its 37.4% stake in Storion Energy, a joint venture focused on producing scalable, U.S.-domiciled electrolyte for utility-scale vanadium redox flow battery long-duration energy storage solutions.
