11/11/26
US aims to grow mineral stockpile
US aims to grow mineral stockpile
Houston, 11 November (Argus) — The US Defense Logistics Agency (DLA) awarded up
to $3.3bn in firm, fixed-price indefinite quantity/indefinite delivery (IDIQ)
contracts for cobalt, gallium, nickel and high purity aluminum for the national
defense stockpile, prompting questions over the quantities to actually be
purchased. Under an IDIQ contract, the agency may place purchases during the
established ordering period under a maximum total purchasing amount, although
the agency is not obligated to buy that volume or value. The awarded values
represent ceilings of what could be spent under the IDIQ contracts and are not
guaranteed purchases. None of the acquisitions were announced officially by the
awardee companies, but a spokesperson for the DLA noted awardees can choose to
publicly share deals. Since the beginning of 2025 Metallus , Elmet , Largo , US
Antimony and Global Advanced Metals all shared public updates on awards with the
agency for strategic materials. The DLA committed $2bn to acquiring strategic
and critical materials for the national defense stockpile throughout fiscal year
2026 (1 October 2025 to 30 September 2026), including high purity aluminum,
according to an agency press release. Previously, the DLA would release the
Annual Materials Plan (AMP), a list of potential material acquisitions including
maximum quantities to be purchased, at the beginning of the agency's fiscal year
in October. The DLA never released an AMP for the 2026 fiscal year and has yet
to release one for 2027, leaving market participants still mulling which
materials the agency already secured and what will be prioritized. Cobalt
Switzerland-based miner and trader Glencore secured a contract to supply cobalt
worth up to $900mn over a five-year period, according to an updated filing on
the agency's procurement website. The DLA declined to comment on the quantity of
material to be purchased. Glencore declined to comment on the award. Market
participants noted without any confirmed information on the quantity or grade of
cobalt the DLA plans to acquire, it would be difficult to gauge the impact on
the market of the total tender as news of the award spread. When the contract
was finalized in May, Argus assessed alloy grade prices on average at
$30-31.50/lb which would imply a volume of approximately 13,276 metric tonnes
(t) at the midpoint of the range, if the full $900mn were spent over the
five-year ordering period at that level. Some sellers questioned whether the
total volume of metal had already been removed from the market and was held in
reserve for the DLA or if Glencore would need to acquire additional metal which
could potentially tighten supply. Some market participants surveyed by Argus
broadly dismissed supply concerns over the contract, particularly dependent on
the grade and timeline. Others were also largely unconcerned about the tender's
impact on the domestic cobalt markets, since the contract was awarded in May
2026, largely unbeknownst to participants until recently. The agency initially
requested quotes for up to 16.5mn lb (7,480t) of alloy-grade cobalt cut cathode
or rounds in August 2025 for a maximum of $500mn before the tender was cancelled
. Ultimately, the request was not competed. Nickel Glencore was also awarded a
separate contract from the DLA for up to $65mn to supply 1,500t of nickel
cathodes and pellets over a five-year ordering period beginning in September.
The agency initially issued a request for information on class 1 nickel products
in March 2026 for 3,500t. Argus obtained a copy of the nickel contract from the
DLA internet bid board system, where it was posted publicly for a time alongside
other non-ferrous contracts for the national defense stockpile, including the
gallium contract, before being pulled. After viewing the nickel contract, market
participants surveyed by Argus posed few questions with some noting the expected
volume to be purchased was relatively small and likely would not impact the
market. Aluminum The Department of Defense announced Rio Tinto was awarded up to
$995mn to supply high purity aluminum to the DLA on 25 September, noting it was
a competitive acquisition with three responses received. The company will supply
"a small volume" of high purity aluminum, Rio Tinto confirmed, but did not
provide further details as to how much material the company could supply over
the five-year period. Aluminum roller Arconic also received an IDIQ award to
supply high purity aluminum for up to $995mn over a five-year period. The
company did not respond to a request for comment. The Department of Defense
awarded Arconic $45.5mn in 2023 to boost production of high purity aluminum for
missiles and munitions. Gallium The DLA awarded Louisiana-based alumina producer
Atlantic Alumina (Atalco) a contract to supply up to $350mn for 55,610kg (55.6t)
of gallium over a five-year ordering period. Atalco did not immediately provide
comment to Argus . The DOD has invested $400mn in the company, with a portion of
the equity financing going toward scaling primary gallium production. The
company expects to make 50t/yr of the semiconductor input once begins producing
commercial volumes. By Jenna Baer Send comments and request more information at
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