Pentagon Seeks Massive Cobalt Stockpile For First Time Since 1990  

The agency responsible for the Pentagon’s supply chain, which organizes, buys, and stores critical materials ranging from rare earth minerals to fighter jet parts, is seeking to purchase a massive stockpile of cobalt for the first time in decades, as the world fractures into a dangerous bipolar state prone to supply chain disruptions. This comes as the U.S. moves to bolster domestic production of rare earths in an effort to reduce reliance on foreign adversaries such as China and Russia. 

According to the System for Award Management (SAM) website, the Defense Logistics Agency (DLA) issued a solicitation to purchase cobalt cut cathode/rounds – sheets of cobalt metal designed for storage – to stockpile up to $500 million worth of the industrial metal (or about 7,500 tons), which is used in numerous defense applications ranging from jet engine turbines to armor-piercing munitions to high-strength permanent magnets in rockets.

Here’s an excerpt of the solicitation from SAM’s website:

This acquisition is NOT set aside for small businesses.  The applicable NAICS code is 331410 – Nonferrous Metal (except Aluminum) Smelting and Refining with a size standard of 1,000 employees.

The Defense Logistics Agency (DLA) by and through DCSO-C3 intends to award a contract minimum of $2,000,000 and a contract maximum of up to $500,000,000 of cobalt cut cathode / rounds. The Government reserves the right to award less than the maximum dollar value. All cobalt to be delivered under any resulting contract shall have a form and packaging conducive to long-term storage in an enclosed Government warehouse per the Statement of Work (SOW).

A source familiar with DLA’s solicitation told Bloomberg this is the first time the agency has sought to purchase cobalt since 1990, marking a sharp reversal after decades of selling down stockpiles after the buildup during the Cold War. 

With the world entering a period of heightened geopolitical risk and supply chain fragility, the move underscores Washington’s urgency to revive domestic supply chains – from semiconductors to rare earths – ahead of the 2030s, a decade widely expected to bring even greater geopolitical volatility. 

At the moment, China dominates the global rare earths industry, including the processing of cobalt and other battery metals, and has built up massive strategic reserves. Meanwhile, the U.S. is signing deals with allies and domestic firms to bolster rare earth production and diversify away from China, with the latest example being the Pentagon’s deal with MP Materials.