The U.S. is increasing pressure to build a strategic raw materials buffer: The Department of Defense (Pentagon), through its Defense Logistics Agency (DLA), intends to acquire critical minerals worth up to $1 billion USD. Public DLA documents reveal that the government intends to rapidly expand the national raw materials reserve – in response to tightened Chinese export controls and the heavy dependence of Western supply chains on China. In addition to rare earths, metals such as cobalt, antimony, tantalum, scandium, germanium, bismuth, and indium are in focus, according to the Financial Times, for example.
Why Critical Minerals are Now at the Center
China dominates large parts of the supply chain: The country mines more than half of the rare earths and controls a large portion of the global processing capacities – estimated at over 90% in individual stages. These materials are essential for military systems (e.g., aircraft engines, radar, guided missiles) and high technology such as smartphones, wind turbines, or e-mobility drives. Accordingly, the U.S. stockpile build-up aims to cushion supply interruptions in geopolitically sensitive phases and to be able to supply the industry if necessary.
Politically, the course is flanked by an extensive package of laws that provides additional funds for critical minerals. This includes billions for national stockpiling, investments in supply chains, and a Pentagon loan program to provide start-up financing for private projects. The DLA already manages inventories of dozens of metals and alloys (most recently with a book value in the billions) and may only release them for war or defense purposes.
Concrete Purchasing Plans: Cobalt, Antimony, Tantalum, and Scandium
The latest procurement lists outline which critical minerals the DLA is prioritizing. Planned are, among others:
- Cobalt: up to approximately $500 million USD. The metal is a key raw material for aerospace alloys and batteries.
- Antimony: approximately $245 million USD, with sourcing from, among others, US Antimony. Antimony is used in flame retardants, alloys, and ammunition.
- Tantalum: approximately $100 million USD from a U.S. supplier. Tantalum is important for capacitors and high-temperature applications.
- Scandium: a total of $45 million USD, distributed among Rio Tinto and APL Engineered Materials (Illinois). Scandium is used in aluminum alloys and solid oxide electrolytes.
Striking is the magnitude of some positions in relation to the U.S. market. For example, the DLA is considering the purchase of 222 t of indium in the form of ingots; according to official statistics, U.S. consumption of refined indium products was recently around 250 t. Analysts also speak of volumes for bismuth and indium that could noticeably tighten the supply outside of China. For scandium, a price range was mentioned for approximately 6 t of scandium oxide, which is said to have been above market expectations. For antimony, there are plans to store around 3,000 t – for comparison: total U.S. demand is estimated at approximately 24,000 t per year.
Price Environment, Supply Chains, and Additional Options
The market reaction to the Chinese export rules is already visible: Germanium became significantly more expensive over the course of the year, antimony trioxide nearly doubled within twelve months. Rare earths also caused bottlenecks in parts of the automotive industry, as some manufacturers rely on dysprosium, terbium, and neodymium for magnets. Against this backdrop, U.S. stockpiling policy serves as insurance against export restrictions, political tensions, or logistical disruptions.
In parallel, Washington is looking at alternative sources: The future securing of raw materials from the deep sea of the Pacific, where cobalt, nickel, copper, and manganese occur in so-called manganese nodules, is being discussed. However, such an option would raise regulatory, environmental, and technological questions that would take years to clarify. In the short term, the DLA purchase aims at marketable, deliverable quantities of critical minerals that can be quickly recorded in the national inventory.
Significance for Companies and Projects
For companies along the supply chain – from explorers to processors to end users – the Pentagon’s plan sets new incentives and reference points. Announced purchases can influence price and procurement dynamics, especially in tight niches such as scandium or indium. At the same time, the state signals its willingness to support domestic capacities, be it through direct purchases, credit lines, or investments in supply chain projects.
For the DLA, the task remains twofold: On the one hand, critical minerals must be procured and stored in sufficient quantity and quality. On the other hand, the inventories must be manageable and ready for use if they are released – according to the mandate – in crises or for national defense needs. The planned purchase volumes show that Washington is aiming for larger buffers than in previous rounds of stockpiling. How strongly these measures reduce dependence on China ultimately depends on whether it is possible to additionally build up processing capacities and downstream structures in North America and allied states.
With the latest procurement program, U.S. raw material security for critical minerals is visibly moving up the agenda. For the market, this means potential demand impulses in selected segments in the short term, as well as a structural change in supply chains in the medium term – away from one-sided dependencies, towards broader sources of supply and strategic reserves. These developments are also leading to an extremely positive environment, at least for companies that we have been following on Goldinvest.de for some time.
For example, the Canadian Ucore Rare Metals (WKN A2QJQ4) with its more efficient and environmentally friendly technology for processing rare earth materials has positioned itself promisingly to benefit from the West’s efforts to build supply chains that are independent of China. The stock has already risen by >1,000% since the beginning of the year in light of this development! American West Metals (WKN A3DE4Y) cannot boast that, even though the Australian company’s stock shows a gain of 22.5% in the last three months. However, American West can boast the largest undeveloped indium resource in the United States (Learn more!) on the West Desert project in Utah, which also has gallium.
Gallium, in turn, is found in the huge waste rock deposit of Cerro de Pasco Resources (WKN A2N7XK) in Peru. The focus there is on silver, but the company has also repeatedly detected high gallium contents with its recent drilling program. The advantage, since the project involves the huge waste dumps of a former mine, is that Cerro de Pasco incurs virtually no mining costs… (Learn more!)
Antimony has also been detected by the Canadian Terra Balcanica Resources (WKN A40DA5) on its polymetallic Viogor Zanik project in Bosnia! At the beginning of the year, the company reported what it calls the “fifth-best antimony find in the world for 2024–25”! (Learn more!). Since then, the Terra Balcanica share has risen by 150%. New drilling results should not be long in coming!
