Drone War Surge Sparked Critical Metals Scarcity
Military drone and counterdrone investment reached US$150 billion, driving metal prices to historic highs.
Updated on Sept. 30, 2026 in Semiconductors
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As of September 30, 2026, global governments have pledged US$150 billion for drone technologies, forcing a rapid, supply-strained pivot toward critical metals. The demand for specific materials like tungsten, gallium, and germanium has escalated significantly due to the scale of modern drone deployment.
Why it matters
The mass mobilization of drones represents a shift in modern warfare that threatens infrastructure and consumes a disproportionate share of global mineral output. This high-intensity demand has pushed prices for critical components like germanium to unprecedented levels.
Germanium prices have climbed from a historic average of US$2,000/kg to over US$11,000/kg as the Ukraine conflict now consumes 4% of total global supply. Average battlefield drones contain roughly 46g of NdFeB magnets, 0.1g of gallium, and 1g of germanium.
The players
Larvotto Resources
An Australian resource development company focused on critical minerals, now operating the Hillgrove mine.
Astron
A mineral processing and development firm targeting rare earth and heavy mineral production.
Energy Fuels
A U.S.-based producer of uranium and rare earth elements that is scaling its domestic processing stack.
Tungsten Mining
A developer managing tungsten assets, currently focused on bringing the Watershed project online.
The details
Military operations are now driving the adoption of layered defense systems meant to neutralize low-cost aerial threats that otherwise endanger multi-billion dollar infrastructure. To meet this demand, firms are deploying proprietary leach processes, a chemical method that dissolves specific metals from ore using specialized solutions to extract gallium from rare earth deposits. This extraction is vital because individual drones require highly specific amounts of specialty metals to maintain flight and sensing capabilities.
Timeline
2023: Drone sector accounted for 8% of military tungsten usage.
2025: Drone sector accounted for 29% of military tungsten usage.
2026: Larvotto Resources commenced production at the Hillgrove mine.
Q2 2028: First production is targeted at the Donald project.
Late 2029: First production is expected at the Nolans project.
The Tech Race
This race for critical minerals follows the rapid rise in military drone adoption documented since the 2025 investment surge. Resource firms are now racing to diversify production away from China to satisfy the massive, conflict-driven demand for tungsten.
The strain on supply chains for gallium and germanium may increase costs for broader electronics manufacturing, as these materials are vital for high-performance semiconductors. Industrial users should prepare for higher lead times and volatility in the pricing of high-grade technical alloys.
The takeaway
The transition to drone-heavy warfare has created a hard resource bottleneck that is unlikely to ease until new mine projects reach scale. Track the 2027 production milestones at the Watershed project as a benchmark for how quickly non-Chinese supply can materialize to meet the new military baseline.
What happens next
Watch for the Watershed project's first production in H1 2027 and the startup of the Donald project in Q2 2028, which represent key milestones in attempts to offset the current tungsten supply concentration.
Further reading
Learn more about material science trends in our Semiconductors section.
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