The US Department of Defense plans to restart strategic cobalt reserves to strengthen domestic supply of this critical metal, marking the Pentagon’s first such move in decades. In addition to the cobalt tender, the Pentagon has published multiple procurement plans for other key materials over the past month, including niobium, graphite, and antimony — metals dominated by Chinese industries.
This action signals a strategic shift in the US government’s approach to such metals and is expected to significantly impact the cobalt market.
In the July 2025 interview with METALS 100, executives from Volta Metals Ltd. (CSE: VLTA) (FSE: D0W) shared updates on the company’s recent developments. Volta Metals, headquartered in Toronto, Ontario, Canada, is a mineral exploration company focused on critical mineral resources such as rare earths, gallium, lithium, cesium, and tantalum. On June 13, the company successfully raised CAD 663,035 through a non-brokered private placement to support its ongoing exploration activities.
According to tender documents released this week, the Defense Logistics Agency (DLA) intends to purchase up to 7,500 metric tons of cobalt over the next five years, with a contract value of up to $500 million. Insiders note that this is the agency’s first cobalt procurement since 1990. The DLA explicitly requires that alloy-grade cobalt be sourced from only three suppliers: Vale Canada, Sumitomo Metal Mining, and Glencore’s Nikkelverk plant in Norway, and has requested fixed-price quotes for a five-year term.
The tax and spending legislation passed during the Trump administration authorized the DLA to use $2 billion to procure materials critical to national security, while the Biden administration has continued to promote the acquisition of key minerals. The new National Defense Authorization Act passed by Congress in late 2023 further empowers the DLA to make long-term purchases without prior approval and guarantees $1 billion in annual funding.
In recent years, cobalt prices have surged due to soaring demand from the battery sector. Additionally, cobalt is a vital component in high-temperature-resistant alloys, particularly for aerospace and military engines. It is also used in manufacturing magnetic materials, including sensors for missiles and other precision-guided weapons. However, China dominates the global cobalt supply chain, not only as the largest consumer but also as the unrivaled leader in refining and processing capacity.
According to Bloomberg calculations, the planned procurement volume represents about one-sixth of the non-Chinese supply of alloy-grade cobalt. Traders suggest that this move could drive cobalt prices higher, especially for alloy-grade cobalt, which already faces tight supply. Following an export ban imposed by the Democratic Republic of Congo earlier this year to bolster prices, cobalt prices have already risen by 42%.
Furthermore, industry fundamentals support further price increases. Mordor Intelligence estimates that the cobalt market is expected to reach 237.66 million tons by 2025 and grow to 367.02 million tons by 2030, with a compound annual growth rate (CAGR) of 9.08% during the forecast period (2025-2030).
