The Pentagon is moving to secure a $1 billion stockpile of critical minerals. The Department of Defense is aiming to insulate the U.S. defense supply chains from China’s tightening control of strategic metals.
According to The Financial Times (FT), the Defense Logistics Agency (DLA) has begun formal procurement steps to acquire vast quantities of minerals. These materials are essential for weapons systems, electronics, and advanced manufacturing.
“They’re definitely looking for more, and they’re doing it in a deliberate and expansive way,” one former U.S. defense official told FT. They described the ramp-up as the sharpest acceleration in America’s stockpiling efforts in decades.
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Last Thursday, Beijing announced new export restrictions on rare earths and related technologies. That retaliatory measure jolted markets and triggered an immediate U.S. political response.
Citing China’s “hostage economics,” President Donald Trump announced sweeping 100% tariffs on Chinese imports on Friday.
“There is no way that China should be allowed to hold the world captive,” Trump wrote on Truth Social. The measures are part of a broader hardline policy linking national security with industrial resilience. It is a cornerstone of Trump’s One Big Beautiful Bill Act, which allocates $7.5 billion to critical mineral initiatives. In addition, it also includes $2 billion for expanding the defense stockpile by 2027.
DLA maintains reserves of metals, alloys, and minerals valued at $1.3 billion as of 2023. However, the use of these materials is for national defense purposes only.
“China’s ability to turn off the supply of these critical minerals would have a direct, palpable, and adverse effect on the U.S. ability to field the kind of high-tech capabilities that we’re going to need,” said Stephanie Barna, a partner at Covington & Burling and former acting assistant secretary of defense.
Recent filings show the Pentagon targeting metals beyond its usual scope. Planned purchases include $500 million of cobalt, $245 million of antimony from U.S. Antimony Corp. (AMEX:UAMY), $100 million of tantalum from a domestic supplier, and about $45 million of scandium from Rio Tinto (NYSE:RIO) and APL Engineered Materials.
Meanwhile, the agency is also exploring acquisitions of tungsten, bismuth, indium, and other rare metals. Since quantities in some cases exceed U.S. annual production, the plan signals preparation for long-term strategic shortages. But building a mineral stockpile isn’t as straightforward as filling warehouses. The Defense Department recently expanded plans to stockpile cobalt for battery and aerospace applications. Yet, the challenge remains structural.
A study by Columbia University’s Center on Global Energy Policy warned that the U.S faces technical challenges in storing critical minerals, in this example, cobalt, for future use.
“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,” Dr. Tom Moerenhout warned.
Price Watch: Sprott Critical Materials ETF (NASDAQ:SETM) has gained 76.71% year-to-date and is up 8.30% in premarket trading on Monday to $28.84.
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