Accurate Energetic Systems signs record contract to produce TNT for DoD

Accurate Energetic Systems (AES), a manufacturer of TNT for the U.S. Department of Defense (DoD), has signed a contract to produce TNT as part of a larger agreement aimed at increasing the production of 155mm artillery shells. This contract is reported to be worth more than all previous contracts AES has signed with the DoD combined.

The contract comes alongside a new agreement awarded to Rheinmetall to produce 155mm shells for an unnamed Eastern European country, with indications that the shells AES is contracted to deliver may be destined for Ukraine. AES is believed to be the primary U.S. manufacturer of TNT for artillery shells, although it is unclear how much of their TNT is sourced from overseas. Last year, the Army awarded a $435 million contract to establish the first large-scale TNT plant in the U.S. since the 1980s, which is not expected to be operational until late 2028.

Prior to the recent developments, production of 155mm shells was already facing challenges. Ukrainian President Volodymyr Zelensky has urged NATO countries to boost production, as Ukraine has struggled with a shortage of artillery shells amid ongoing conflict with Russia. Reports from February 2025 indicated that Russia was firing up to 10,000 shells a day, while Ukraine was firing approximately 2,000 shells daily. In 2024, Congress allocated $6.4 billion to the U.S. Army"s budget specifically to enhance 155mm shell production, with plans to increase output from 14,000 shells per year to 40,000 shells per year.

Issues with 155mm shell production have been noted even before the current conflict. Between summer 2014 and fall 2015, the U.S. produced no shells due to manufacturing mismanagement. In 2021, defects were found in shells produced at an American facility. Over $100 million was reportedly spent on unsuccessful attempts to update the explosives used in Army shells, with materials sourced globally, including from China and areas in eastern Ukraine controlled by Russia.

Concerns about production facilities have also been raised. In Tennessee, a $147 million factory dedicated to explosives was found idle, while a Pennsylvania shell-casing factory, dating back to the Korean War, was operating with minimal upgrades. In Iowa, manufacturing flaws led to production line shutdowns, and a $399 million project in Virginia was reported to be significantly