US Cancels $500 Million Cobalt Tender Amid Critical Minerals Uncertainty

Cobalt Tender Cancellation Marks a Blow to US Critical Mineral Strategy

The United States has abruptly canceled its $500 million cobalt tender, sending ripples through the battery metals market. The Defense Logistics Agency (DLA) first announced the plan in August, aiming to secure up to 7,500 tons of cobalt over five years. The contract would have been the US government’s first major cobalt acquisition since 1990.

However, after extending the offer deadline several times—from August 29 to October 15—the DLA abruptly scrapped the tender. According to a government statement, unresolved issues in the Statement of Work must be addressed before reissuing the solicitation. This cancellation highlights the complexity of rebuilding critical mineral reserves and the logistical hurdles in diversifying away from China-dominated supply chains.

Cobalt plays a pivotal role in clean energy and defense. It’s a key component in lithium-ion batteries for electric vehicles (EVs), military systems, magnets, and aerospace alloys. The US move to secure supply came as global cobalt prices surged, largely driven by export restrictions from the Democratic Republic of Congo (DRC), which supplies about 75% of the world’s cobalt.

US Cobalt Tender Pulled As Prices Soar and Supply Chains Strain

This canceled tender comes at a time of mounting pressure on Western nations to stabilize their critical minerals supply. The DRC recently shifted from a full export ban to a quota-based system, fueling price volatility. Benchmark cobalt prices have doubled since February, after initially falling below $10 a pound for the first time in over two decades. The tender was designed to hedge against such fluctuations, offering fixed prices across five years from selected producers.

Notably, the DLA had targeted three key global producers for alloy-grade cobalt: Vale SA (Canada), Sumitomo Metal Mining Co. (Japan), and Glencore Plc’s Nikkelverk facility (Norway). However, sourcing from these Western-aligned companies still faces logistical and pricing complications. Last month, the agency even amended the offer to exclude a specific Vale brand, signaling technical or specification-related constraints.

While the DLA intended to allocate between $2 million and $500 million for this procurement, the cancellation underscores how policy ambitions often collide with operational realities. Without resolving internal procedural hurdles and aligning supplier capabilities, the US risks falling further behind in the race for battery material independence.

SuperMetalPrice Commentary:

The US cobalt tender cancellation is more than a bureaucratic hiccup—it signals deeper structural issues in America’s critical minerals strategy. As the energy transition accelerates, access to cobalt and other battery materials grows more geopolitically charged. Washington’s dependence on overseas processing, particularly from China, clashes with its national security and green technology goals. This latest setback should be a wake-up call for policymakers: building resilient supply chains requires not just funding, but streamlined procurement, supplier engagement, and technical precision. Until these gaps are closed, the US may struggle to meet its EV and defense material demands.