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Investing.com -- The U.S. Defense Department plans to purchase cobalt for its strategic stockpiles for the first time since 1990, marking a significant shift in government strategy for securing critical metals.
According to Bloomberg, citing a tender documents published this week, the Defense Logistics Agency (DLA) is seeking offers for up to 7,500 tons of cobalt over the next five years in a contract valued at up to $500 million.
The planned purchase represents approximately one-sixth of non-Chinese supply of alloy-grade cobalt, based on Bloomberg calculations, and comes amid rising prices driven by an export ban from the Democratic Republic of Congo, the metal’s top producer.
Cobalt has become increasingly important due to its use in batteries, but it also serves crucial military applications. The metal is used in cobalt-based alloys for munitions and jet engines, and is essential for magnets used in airplane components including flaps, landing gear, and flight control surfaces.
This procurement marks a reversal from previous decades when the DLA sold off its Cold War-era cobalt stockpiles due to budget cuts in the 1990s and 2000s.
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