The Pentagon is increasing its stock of important metals with a billion-dollar buying wave

The Pentagon has sought to buy up to $1 billion worth of critical minerals as part of a global stockpiling spree to counter Chinese dominance of minerals deemed essential to defense manufacturers.

The Trump administration’s accelerating efforts to bolster the national stockpile have been laid out in public filings released by the Pentagon’s Defense Logistics Agency in recent months. This comes in the wake of export restrictions imposed by China on several materials, which dominate supply chains for vital minerals. permanent magnet Necessary for technologies from smartphones to fighter jets.

“They (the Pentagon) are incredibly focused on the stockpile,” one former defense official said. “They are definitely looking for more, and doing so in a thoughtful and expansive way, looking for new sources of different ores needed for defense products.”

Another former defense official said the $1 billion represents an acceleration of previous storage efforts.

Beijing this week unveiled sweeping new controls on exports of rare earths and related technologies, prompting Donald Trump to say on Friday that he would no longer meet with Chinese leader Xi Jinping later this month as planned.

Trump said the United States would impose additional 100 percent tariffs on Chinese imports in response, adding: “There is no way to allow China to hold the world ‘captive’ but it appears that was their plan.”

The restrictions imposed by Beijing have raised concerns in the United States and Europe about their continued access to minerals.

Critical minerals are a national security priority for the Pentagon because they are essential to nearly every weapons system, as well as technologies such as radar and missile detection systems. The Department of Defense’s recent storage activity is a notable acceleration driven by the Trump administration’s renewed enthusiasm for critical minerals. Some of the minerals the Pentagon is seeking were not previously stored.

“China’s ability to cut off supplies of these critical minerals would have a direct, tangible, and negative impact on the ability of the United States to provide the kind of high-tech capabilities we will need for any type of strategic competition or conflict,” said Stephanie Barna, an attorney at Covington & Burling in Washington.

Recent expressions of interest from DLA include plans to purchase up to $500 million of cobalt, up to $245 million of antimony from domestic US Antimony Corporation, up to $100 million of tantalum from an undisclosed US company, and up to $45 million of scandium from Rio Tinto and APL Engineered Materials, an Illinois-based chemical manufacturing company. It has offices in Japan and China.

One industry executive said the plans showed the US government “was aware of how important these things were, and wanted to support any domestic capacity they had.” “It is too early for Western governments to stockpile critical minerals, but they are increasingly focused on doing so.”

DLA stocks dozens of bullion, metals, rare earths, ores and precious metals, which are stored in warehouses across the country. Its assets were valued at approximately $1.3 billion as of 2023. The president can only release the materials in times of declared war, or if the Under Secretary of Defense deems them essential to the national defense for acquisition and sustainment.

The price of germanium has risen this year as exports from China and Western traders have declined ‘Panic’ warning In a market where companies were struggling to get by. The germanium issue is one the Pentagon is trying to fix.

The price of antimony trioxide has nearly doubled over the past 12 months Automakers have struggled To secure rare earth materials this year after China restricted certain exports.

Trump Big, beautiful bill It contains $7.5 billion for critical minerals, including $2 billion to boost the National Defense Stockpile that the Pentagon plans to spend by late 2026 or early 2027.

The OBBA program also includes $5 billion for Department of Defense investments in critical minerals supply chains and $500 million for a Pentagon credit program to stimulate investments.

One former defense official said many offices involved in securing critical metals supply chains are now “awash with cash” after the passage of OBBA.

DLA declined to comment.

Analysts at Jefferies said Rio’s deal, for about 6 tons of scandium oxide, was priced “higher than market expectations.” Global consumption of scandium oxide is about 30-40 tons, according to price reporting agency Fastmarkets, with China the main producer.

The DLA said in its filings that Chinese export controls on scandium “restricted the supply chain.”

Meanwhile, the deal with USAC for antimony will grow a stockpile “sufficient to mobilize the industrial base in a national emergency” and enable the company to continue production in a “volatile” sector.

Gary Evans, the company’s CEO, told the Financial Times that the American company obtains the extracted materials that it turns into metal from Canada, Mexico, Australia, Chad, Bolivia and Peru. The company reported revenues of $15 million in 2024 and did not announce its annual production of antimony metal. DLA’s deal is for about 3,000 tons of antimony metal compared to total U.S. antimony consumption in 2024 of 24,000 tons. According to the United States Geological survey.

“Market participants were surprised by the volumes requested by DLA across several metals. Many consider the volumes unrealistic, especially within the proposed five-year timeframe,” said Cristina Belda, of Argus Media. “In most cases, the tonnages required exceed annual U.S. production and import levels.”

DLA also sought information on the potential acquisition of rare earth elements, tungsten, bismuth and indium to add to the stockpile.

Solomon Sifai of Fastmarkets said volumes for bismuth and indium were “significant” given the global size of the markets. “It is difficult to imagine a situation where non-Chinese supply is not under pressure due to the volumes that DLA is eyeing,” he said.

DLA is seeking information on the potential acquisition of 222 tons of indium bullion, which compares to U.S. consumption of refined indium of about 250 tons in 2024, according to the USGS.