The US Department of Defense has called off a tender for cobalt procurement, underscoring the ongoing challenges Western nations encounter in securing critical minerals.
In mid-August, the Defense Logistics Agency (DLA) initially sought offers to procure up to 7,500 tonnes (t) of cobalt over the next five years, under a contract valued at $500m, marking the US Government’s first effort to acquire the metal since 1990, reported Bloomberg.
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The DLA has extended the deadline for offers several times, moving it from the original date of 29 August to 15 October.
However, the tender has been withdrawn, marking a setback for US efforts to replenish its critical-mineral reserves following decades of deadlines.
A notice on a US Government website stated: “There are outstanding issues with the Statement of Work that need resolution before offers may be solicited.”
Enhancing the supply chains for metals such as cobalt has become a political priority for the US and other Western countries, which are aiming to reduce their dependence on China.
Cobalt is essential for rechargeable batteries, including those in electric vehicles (EVs), and has applications in magnets, military systems, munitions and jet engines.
Beijing has established a stronghold in cobalt processing and amassed a considerable state reserve.
The US tender followed a rally in cobalt prices due to export controls by the Democratic Republic of Congo, which produces around three-quarters of the global cobalt output.
The nation recently replaced a full ban on shipments with a quota system.
Since the export suspension was imposed in February, benchmark prices have doubled.
Prior to this, cobalt prices had fallen below $10 per pound, a threshold not crossed in 21 years, except for a short decline in late 2015, as reported by Fastmarkets.
The DLA sought offers for alloy-grade cobalt from three producers: Vale in Canada, Sumitomo Metal Mining in Japan and Glencore’s Nikkelverk plant in Norway.
Suppliers were asked to propose fixed prices over five years, with one amendment excluding a brand from Vale.
The US Government initially planned to allocate between $2m and $500m for the contract.
