The U.S. Department of Defense's (DoD) Office for the Assistant Secretary of Defense for Industrial Base Policy (OASD (IBP)) has entered into an agreement with Arconic Corporation to increase production of missiles and munitions.
The purpose of the $45.5 million agreement with Arconic is to increase production of High Purity Aluminum (HPA) at its facility in Davenport, Iowa. The low-cost production of HPA by foreign smelters has resulted in decreased production of HPA in the United States.
The DoD is utilizing Defense Production Act (DPA) Title III authorities and funds appropriated by the Additional Ukraine Supplemental Appropriations Act. The project will provide the United States much-needed surge capacity for HPA production and mitigate risks to national security in the event of an industrial mobilization. The funds will be used for infrastructure at the facility and modifications to accommodate the increased capacity and new equipment. Among the improvements are the design and installation of a new furnace and the implementation of new control and automation systems. HPA is a critical material for many military and commercial systems, including aerospace platforms and tactical ground vehicles.
Arconic supplies Aluminum for Russian defense industry
Arconic has established Samara Metallurgical Plant, a sprawling complex in southwestern Russia, to produce aluminum for commercial and industrial products. It is also a source of critical parts for the Russian warplanes and missiles.
While Arconic does not make weapons, its sophisticated forges are among a handful of machines in Russia that can form lightweight metals into large aerospace parts like bulkheads and wing mounts.
Under an agreement with the Russian government, the company has from the start of its operations at Samara, in 2004, been legally required to supply Russia’s defense industry as a condition of operating a plant whose mostly nonmilitary output has proved tremendously lucrative.
Though there is no indication that Arconic is in breach of American or other Western sanctions, those penalties have made it difficult to keep the plant supplied and operating. But shutting down production could expose its employees there to jail time under Russian laws on maintaining strategic production. And Russia has already cut off Arconic’s access to profits from the Samara plant.
“The conflict in Ukraine has made our continued presence in Russia untenable, which led to our decision to pursue a sale,” Timothy Myers, Arconic’s chief executive, said in a written statement to the New York Times in May 2022.