US Defense Department buys cobalt up to $500 Million
As part of its efforts to increase the supply of critical minerals, the U.S. wants to buy cobalt for up to $500,000,000 to be used in defense stockpiles.
After China implemented restrictions on rare earth magnets, companies have scrambled to find them. This led to a drop of 75% in exports in June. Some automakers even suspended production.
In March, U.S. president Donald Trump invoked emergency powers in order to increase domestic production of vital minerals. This was part of an effort to counter China's near total control of this sector.
In July, it was reported that David Copley, a former mining executive who had worked in the United States for over 30 years, would be heading a National Security Council office focusing on supply chain strengthening.
The Department of Defense (DLA) and Defense Logistics Agency (DLA), published a tender document on Wednesday. They are seeking offers for alloy grade cobalt of approximately 7,480 tonnes per year.
Cobalt is a metal that is mainly imported by the United States. It's used as a component of nickel superalloys in high-temperature sections for jet engines, industrial gas turbines and other applications.
The defense department, however, was only interested in offers from three companies: Vale SA units in Canada, Sumitomo Metal Mining of Japan, and Glencore Nikkelverk of Norway.
The document stated that the purchase amount could range between $2 million to $500 million over a five-year period. (Reporting and editing by Maju Samuel in Bengaluru, Tanay Dhumal)
(source: Reuters)
