Pentagon plans $1 bn mineral stockpile to counter China's supply control

The US is ramping up efforts to secure key minerals, aiming to reduce its reliance on China for materials critical to defence systems, technology and manufacturing

The Pentagon has moved to buy up to $1 billion worth of critical minerals as part of a major stockpiling drive aimed at reducing dependence on China for key metals used in defence and technology, Financial Times reported. The move comes amid rising concerns in Washington over Beijing’s dominance in global mineral supply chains. China controls over 80% of global rare-earth refining, according to the US National Defense Lab. 

The US Defense Logistics Agency (DLA), which manages the national stockpile, outlined the plan in recent public filings. The effort builds on measures introduced during the Trump administration to safeguard supply lines after China imposed export restrictions on several essential materials. 

 

Beijing’s latest export curbs on rare earths have deepened fears in the West about long-term access to these materials. In response, US President Donald Trump announced a 100 per cent tariff on Chinese imports, saying China should not be allowed to “hold the world captive”.

 

Why critical minerals matter

Critical minerals are vital to producing weapons systems, radar equipment and missile detection technologies.

 

Uses of cobalt:

• Batteries

• Pigments

• Medical implants

• Component in nickel superalloys for high temperature sections of jet engines and industrial gas turbines

 

Uses of antimony:

• Automotive batteries (lead-acid)

• Ceramics and glass

• Flame retardants (flameproof fabrics)

• Cable sheathing

• Automotive brake pads (additive to adjust coefficient of friction)

 

Uses of tantalum:

• Chemical processing equipment

• Heat exchangers

• Anti-lock brake systems

• Night vision goggles

• Global positioning systems

• Missile systems

• High temperature aerospace engine parts

 

Uses of scandium:

• Lasers

• Electronics

• Frames in scandium alloy in pistols

• High-intensity lamps for landing gear

• Light aluminium-scandium alloy for aerospace components

 

The DLA’s latest acquisition plans include:

• Up to $500 million of cobalt

• Around $245 million of antimony from the US Antimony Corporation

• About $100 million of tantalum from an undisclosed domestic supplier

• Nearly $45 million of scandium from Rio Tinto and Illinois-based APL Engineered Materials

 

A sector executive said the plans reflect Washington’s growing awareness of how critical these materials are and its push to support domestic production, the news report said. 

 

Prices surge amid supply fears

Prices for several minerals have soared following China’s export cuts. Germanium prices have jumped, causing panic among Western traders, while antimony trioxide prices have nearly doubled in a year. Automakers, too, are facing difficulties securing rare earth materials needed for electric vehicles and batteries. 

The Pentagon is tapping funds from Trump’s One Big Beautiful Bill Act (OBBA), which allocates $7.5 billion for critical minerals. Of this, $2 billion will be used to expand the national defence stockpile by 2026-27. Another $5 billion will go toward securing supply chains, and $500 million will back a new credit programme to attract private investment, the news report said.

 

Large orders raise market concerns

Analysts say the Pentagon’s aggressive purchase targets may exceed market capacity. 

The DLA is also exploring purchases of rare earths, tungsten, bismuth, and indium. For indium alone, it seeks 222 tonnes, which is nearly the US’s total annual refined consumption. Experts warn that these large-scale acquisitions could tighten non-China supplies and push prices even higher, Financial Times reported. 

With China still the leading producer of many of these materials, Washington’s $1-billion stockpiling plan highlights an urgent effort to rebuild its mineral independence.