The US has canceled a $500 million tender to purchase cobalt. The decision came after multiple extensions, less than two months after launching the initiative.
The Defense Logistics Agency (DLA) first invited bids in mid-August for up to 7,500 tons of alloy-grade cobalt over five years. The plan was the government’s first stockpile acquisition since 1990, building resilience against potential critical minerals shortages.
“There are outstanding issues with the Statement of Work that need resolution before offers may be solicited. Upon resolution, solicitation will be re-issued with a new opening and closing date,” states the notice on the DLA website.
Also Read: Trump Likely To Invest In More Rare Earths, Bessent Says
The DLA had limited eligible suppliers to three producers, Vale SA (NYSE:VALE) in Canada, Sumitomo Metal Mining (OTC:SMMYY) in Japan, and Glencore’s (OTC:GLCNF) Nikkelverk refinery in Norway. Washington clearly intended to source cobalt from allied nations.
Yet, stockpiling such commodities is not as straightforward a process as it might seem. In July, Columbia University’s Center on Global Energy Policy warned of deeper challenges in Washington’s new stockpiling push.
“Building such a stockpile comes with significant design and implementation challenges. A successful effort will require clarity of purpose, strategic alignment between stakeholders, and substantial investment,” said lead author, Dr. Tom Moerenhout. The report cautioned that poor storage conditions could degrade cobalt’s usability over time, undermining stockpile value.
Earlier this year, the Democratic Republic of Congo (DRC) banned cobalt exports, causing market turmoil. African nation, which accounts for roughly three-quarters of the global output, tried to curb oversupply and lift prices. The effort more than doubled the prices, forcing buyers to scramble for stable sources.
Still, this week, the DRC replaced its blanket ban with a quota-based export system. Under the new rules, companies must export their complete allocated volumes or risk losing their quotas. The Strategic Mineral Substances Market Regulation and Control Authority warned that it will revoke allocations for firms that fail to meet export, tax, or environmental compliance, or that attempt to transfer quotas.
China’s CMOC received 6,500 tons and Glencore 3,925 tons for the fourth quarter of 2025, with the top five operators accounting for 80% of quotas. From 2026, unused allocations will revert to a 9,600-ton strategic reserve managed by the regulator for projects of national importance.
Facing uncertainty, the Trump administration is turning to a different solution — equity stakes in strategic industries. On Tuesday, Treasury Secretary Scott Bessent noted the government plans to increase its efforts.
“When you’re facing a non-market economy like China, you have to exercise industrial policy,” he said per Reuters. He clarified that future U.S. strategy will hinge not just on stockpiles, but on direct control of critical supply chains.
Read Next:
Photo by Magnetix via Shutterstock
