Largo Secures Five-Year DoD Contract for 2,876 Tonnes Vanadium Pentoxide Worth $125M
LGO•Largo’s subsidiary won a five-year IDIQ contract with U.S. Defense Logistics Agency to supply up to 2,876 metric tonnes of high-purity vanadium pentoxide under firm-fixed-price orders totaling US$125 million. The deal sets per-pound premiums above benchmark indexes with 10% annual escalation, positioning Largo as a strategic supplier.
1. Contract Award
Largo USA secured a five-year IDIQ contract with the U.S. Defense Logistics Agency to deliver up to 2,876 metric tonnes of high-purity vanadium pentoxide, with firm-fixed-price delivery orders totaling US$125 million under a flexible delivery schedule.
2. Pricing Structure
The contract establishes fixed-price-per-pound premiums above 2026 benchmark V₂O₅ indexes, escalating by 10% annually over the five-year term to enhance price stability and margin visibility.
3. Strategic Positioning
Awarded after extensive vetting, the deal underscores Largo’s role in strengthening Western-aligned vanadium supply chains for defense and industrial applications, reducing reliance on China and Russia which supply about 80-85% of global vanadium.
4. Production and Outlook
Vanadium pentoxide will be produced at Largo’s Maracás Menchen Mine and processing complex in Brazil, with the contract expected to boost revenue, improve price realizations, and support further engagements with U.S. government agencies.
