The U.S. Department of Defense plans to spend $1 billion to accelerate the purchase of key minerals such as cobalt and antimony

The U.S. Department of Defense is seeking to procure critical minerals worth up to $1 billion as part of a global stockpile program to address challenges in the critical metals supply chain. On Monday, media reports cited relevant documents from the U.S. Department of Defense indicating that the plan involves large-scale procurement of various strategic minerals. The Defense Logistics Agency's recent procurement intentions include plans to purchase up to $500 million worth of cobalt, $245 million worth of antimony from U.S. Antimony Corporation, $100 million worth of tantalum from an undisclosed U.S. company, and a total of $45 million worth of scandium from Rio Tinto and APL Engineering Materials Company based in Illinois. These critical minerals are a priority for the Department of Defense and are essential for nearly all weapon systems as well as technologies such as radar and missile detection systems. Analysts noted that market participants were shocked by the quantities requested by the Defense Logistics Agency, with many believing these amounts are unrealistic within the proposed five-year timeframe. The Trump administration's "major comprehensive bill" includes $7.5 billion for critical minerals, of which $2 billion is earmarked to strengthen national defense reserves, with the Department of Defense planning to spend this funding by the end of 2026 or early 2027. Reserve Scale Far Exceeds Historical Levels This reserve activity by the Department of Defense marks a significant acceleration driven by the Trump administration's renewed focus on critical minerals. A former defense official stated that the scale of $1 billion represents a significant increase compared to past reserve efforts. "They (the U.S. Department of Defense) are extremely focused on reserves," said a former defense official. "They are clearly seeking more and are doing so in a thoughtful and comprehensive manner, looking for new sources of different ores needed for defense products." The Defense Logistics Agency reserves dozens of alloys, metals, rare earths, ores, and precious metals, which are stored in warehouses across the country. As of 2023, its assets are valued at $1.3 billion. These materials can only be released by the president during wartime or when deemed necessary for national defense by the Deputy Secretary of Defense responsible for procurement and maintenance. According to Stephanie Barna of the Washington law firm Covington & Burling, disruptions in the supply of these critical minerals would have direct, obvious, and adverse effects on the U.S. deployment of high-tech capabilities, which are necessary for any strategic competition or conflict. Procurement Targets Exceed Conventional Market Scale Market analysts expressed surprise at the scale of procurement requested by the Defense Logistics Agency. According to Cristina Belda of Argus Media, “Market participants are shocked by the quantities requested by the Defense Logistics Agency across various metals. Many believe these quantities are unrealistic, especially within the proposed five-year timeframe.” In most cases, the requested tonnage exceeds U.S. annual production and import levels. The transaction with U.S. Antimony Corporation involves approximately 3,000 tons of antimony metal, while data from the U.S. Geological Survey indicates that total U.S. antimony consumption in 2024 will be 24,000 tons. The agency is also seeking information on potential procurement of 222 tons of indium ingots, which compares to an estimated U.S. refined indium consumption of about 250 tons in 2024. Solomon Cefai of Fastmarkets stated that the quantities of bismuth and indium are “significant relative to the global market scale.” The Defense Logistics Agency is also seeking potential procurement information for materials such as rare earths, tungsten, bismuth, and indium to add to its reserves. Gary Evans, CEO of U.S. Antimony Corporation, stated in a media interview that the company procures mineral raw materials from Canada, Mexico, Australia, Chad, Bolivia, and Peru for metal processing. The company's revenue for 2024 is projected to be $15 million, and it has not disclosed its annual antimony metal production. Additionally, Jefferies analysts indicated that the deal with Rio Tinto involves approximately 6 tons of scandium oxide, with prices "above market expectations." According to data from price reporting agency Fastmarkets, global consumption of scandium oxide is about 30-40 tons. An industry executive stated that these plans demonstrate that the U.S. government "recognizes the criticality of these materials and wants to support any local capacity they have." The executive added: "Western governments' reserves of critical minerals are still in a very early stage, but they are increasingly focused on this."