The United States is embarking on a bold new chapter in its economic and security strategy, as the Department of Defense announces its first strategic cobalt procurement plan in 35 years. This move, revealed on August 23, 2025, by the Defense Logistics Agency (DLA), signals a profound shift in how the U.S. approaches the sourcing and safeguarding of critical minerals—those essential, often-overlooked elements that power everything from electric vehicles and smartphones to fighter jets and renewable energy infrastructure.
According to tender documents released this week and reported by multiple outlets, the DLA will seek to purchase up to 7,500 tons of cobalt over the next five years. The contract’s value could reach $500 million, representing roughly one-sixth of the global supply of alloy-grade cobalt outside of China. As noted by Fast Company, this is not just a procurement plan—it’s a strategic realignment, one that underscores the government’s growing concern over the security and resilience of its supply chains for critical materials.
Cobalt has long been a linchpin in both civilian and military technologies. It’s a key ingredient in the batteries that power electric vehicles and portable electronics, but its importance doesn’t end there. According to the DLA’s own documentation, cobalt-based alloys are vital for munitions, jet engines, and magnets used in aircraft flaps, landing gear, and flight controls. In short, if it flies, drives, or stores energy, there’s a good chance cobalt is involved.
But here’s the rub: the global cobalt supply chain is fraught with risk. More than 70% of the world’s cobalt comes from the Democratic Republic of Congo (DRC), a country that recently imposed an export ban, sending cobalt prices soaring by 42%. Even more concerning for U.S. policymakers, as reported by Fast Company, is China’s near-total dominance of the cobalt processing industry. China has built up substantial strategic reserves through its National Food and Strategic Reserves Administration, giving it an outsized influence over global prices and availability.
This precarious dependence on foreign—sometimes adversarial—sources has set off alarm bells in Washington. The DLA’s new tender is explicit: only three producers are eligible to supply the U.S. government’s cobalt needs for this initiative—Canada’s Vale SA, Japan’s Sumitomo Metal Mining, and Glencore’s Nikkelverk plant in Norway. Suppliers must agree to fixed prices for five years, a clear attempt to shield the U.S. from the wild price swings that have plagued commodity markets in recent years.
What’s driving this urgency? The answer lies in the shifting sands of global geopolitics. As Fast Company points out, supply chains built for efficiency are running headlong into a new era of resource nationalism and trade conflict. The U.S. has imposed fresh tariffs on Chinese graphite, prompting China to slap export controls on gallium and germanium. The ongoing conflict between Russia and Ukraine has disrupted supplies of uranium and nickel, while South American governments are moving to nationalize mineral wealth. In this new world, access to minerals is being treated with the same gravity as oil or semiconductors—a matter of national security.
It’s not just governments that are waking up to this reality. Private companies are starting to hedge their bets, too. Tesla has inked direct deals with lithium and nickel miners, General Motors has taken equity stakes in U.S.-based lithium projects, and Apple has secured multi-year offtake agreements for rare earth magnets. These are not mere public relations stunts. As Fast Company observes, "They’re strategic hedges against a future where availability—not price—is the real constraint."
For most companies, the lesson is clear: knowing your supply chain is no longer optional. The days when executives could rattle off their top cloud providers but draw a blank on where their lithium or cobalt comes from are over. The risks are simply too high. The recommended playbook includes geographic diversification of suppliers, greater visibility into upstream sources, implementation of digital traceability systems to meet ESG and regulatory demands, active engagement with government incentive programs, and robust scenario planning for supply disruptions.
This new U.S. procurement initiative is legally grounded in tax and spending legislation passed during the Trump administration, which allocated approximately $2 billion to the DLA for the purchase of materials vital to national security. The National Defense Authorization Act of 2023 further empowers the DLA, granting it greater autonomy in long-term procurement and guaranteeing $1 billion in annual funding. Since July 30, 2025, the Defense Department has issued more than six tenders for critical materials, including niobium, graphite, and antimony—each a sector where China currently holds sway. The sheer volume of tenders this year is the highest since the end of the Cold War, according to industry experts cited by Fast Company and other sources.
The ripple effects of these moves are already being felt in global markets. Industry observers predict that such centralized government procurement will drive up prices for alloy-grade cobalt, especially given the limited supply that meets stringent military specifications. But for U.S. policymakers, the tradeoff is worth it. The goal is to reduce America’s dependence on foreign sources, strengthen national economic security, and ensure the resilience of the defense industrial base. As the DLA’s actions make clear, the U.S. is moving from a post-Cold War era of drawing down strategic reserves to a new phase of rebuilding them—one that’s likely to shape the global minerals market for years to come.
For companies outside the mining sector, the message is equally urgent. As Fast Company warns, "Critical minerals are becoming the next strategic bottleneck, just as semiconductors were two decades ago." Those that treat mineral sourcing as a mere procurement function risk being left behind. The winners of the next decade will be those that are operationally prepared, with defined strategies for sourcing critical minerals, knowing their origins, and having contingency plans in place for when—not if—disruption strikes.
As the world barrels toward an electrified, interconnected future, the scramble for critical minerals like cobalt is only set to intensify. The U.S. government’s latest move is a clear signal: in the new age of resource competition, those who plan ahead will be the ones who keep moving when others stall.
