ASX critical mineral stock Metallium Ltd (ASX: MTM) shares are lower on Tuesday, despite the critical minerals company announcing a new US government contract.
At the time of writing, the Metallium share price is down 4.63% to 51.5 cents.
The fall adds to a difficult run for shareholders. Metallium shares are down around 24% over the past month and have fallen about 52% in 2026.
Let's take a closer look at the contract.
Image source: Getty Images
US defence contract lands
In its ASX release, Metallium said its Flash Metals Texas subsidiary has been awarded a Phase II Small Business Innovation Research contract.
The contract is with the US Department of War through the Defence Logistics Agency.
It is worth US$1 million and will support pilot-scale development and scale-up of Metallium's Flash Joule Heating technology.
The work is aimed at recovering gallium and germanium from electronic waste.
Metallium said the Phase II program follows the successful completion of Phase I, which showed its technology could recover gallium from semiconductor and electronic waste streams.
The company said Phase I was delivered in six months, with all technical milestones achieved.
Why these minerals are important
Gallium and germanium aren't household names, but they sit in some important parts of the economy.
They are used in radar systems, satellite electronics, missile guidance systems, advanced semiconductors and communications technology.
Metallium said the US is fully dependent on imports for gallium supply, with China responsible for around 100% of global primary gallium production.
The company also said germanium supply remains constrained, with the US relying heavily on imports.
Against that backdrop, Metallium is trying to position its technology as a way to recover strategic materials from electronic waste.
The company said Phase II will focus on extracting both gallium and germanium from electronic waste streams at its Texas Technology Campus.
It will also support pilot-scale deployment, technology optimisation, operating conditions and commercial readiness.
More progress in the US
Metallium said the program will run for 12 months and could lead to a Phase III award and broader commercial deployment.
The company also said it may place Flash Metals Texas technology with a Phase III award on a no-cost lease basis.
From there, the technology could support US government or commercial gallium procurement.
The update also follows Metallium's recent collaboration with Indium Corporation, a major US refiner of gallium, germanium and other critical metals.
Foolish takeaway
Metallium is still a high-risk small-cap stock, so investors are not giving it much room for error.
A US$1 million contract is not huge, but having the US government as a customer gives the announcement extra weight.
The next test is whether these pilot programs can turn into larger commercial work.
