US builds $1B crit-mins stockpile to defy China: FT

The Pentagon has moved to acquire up to $1 billion worth of critical minerals as part of an accelerated stockpiling drive aimed at reducing U.S. dependence on China, the Financial Times reported on Sunday, citing public filings from the Defense Logistics Agency (DLA).

According to the FT, the Trump administration directed the Defense Department to expand its national stockpile after Beijing tightened export controls on materials crucial to defence and high-tech industries. China dominates global supply chains for many of these metals, including those used in fighter jets, radar systems and smartphones.

Beijing last week announced sweeping new export restrictions on rare earths and related technologies, prompting US President Donald Trump to cancel a planned meeting with his Chinese counterpart Xi Jinping, and to pledge a 100% tariff on Chinese imports.

“There is no way that China should be allowed to hold the world ‘captive’,” Trump said on his Truth Social account.

China’s control

Within the U.S., these restrictions have fueled fears among those reliant on Chinese supply. China mines more than half of the world’s rare earths and controls over 90% of the minerals’ processing capacity, making it by far the most dominant player in the global supply chain. As such, a stockpile of these minerals would serve as a safeguard against potential supply disruptions, especially during geopolitically sensitive periods.

The Pentagon’s broader push is backed by Trump’s One Big Beautiful Bill Act (OBBA), which allocates $7.5 billion for critical minerals—$2 billion to expand the national stockpile by 2027, $5 billion for supply chain investments, and $500 million for a Pentagon credit program to spur private projects. 

According to FT, the Pentagon’s new buying activity would involve not only rare earths but also metals not previously mentioned for a national stockpile. Recent filings seen by the paper showed that DLA intends to buy up to $500 million of cobalt, $245 million of antimony from United States Antimony (NYSE-A: UAMY), $100 million of tantalum from an undisclosed American supplier, and a combined $45 million of scandium from Rio Tinto (NYSE, LSE, ASX: RIO) and Illinois-based APL Engineered Materials.

Several defence offices are flush with cash for the program and the surge in stockpiling shows the government knows the metals are important for industry and wants to support domestic capacity, sources in defence and mining told the newspaper. They spoke on condition of anonymity because of the sensitive topic which has implications for national security and metal prices. 

The DLA, which already stockpiles dozens of metals and alloys valued at $1.3 billion as of 2023, can release them only in wartime or for national defence needs. The new push comes after a public-private partnership to stockpile minerals in Nevada at the world’s biggest ammunition dump was announced in August. 

Pacific seabed

In another move aimed at countering Chinese dominance, the Trump administration is also considering stockpiling minerals found on the Pacific Ocean seabed, which is rich in nickel, cobalt, copper and manganese, among others, the FT reported earlier this year.

Prices for several key minerals have surged amid tighter Chinese exports. Germanium prices have spiked this year, while antimony trioxide has nearly doubled over the past 12 months. Car makers have also faced shortages of rare earth elements following new Chinese curbs.

However, the DLA’s proposed volumes have startled some market participants. Cristina Belda of Argus Media told the FT that requested quantities, in many cases, exceed the U.S. annual production and import levels.

Fastmarkets analyst Solomon Cefai noted that the sought-after volumes of bismuth and indium were significant enough to potentially constrain non-China supply. According to the U.S. Geological Survey, domestic consumption of refined indium in 2024 was around 250 tonnes, while the DLA is looking into buying 222 tonnes of indium ingots.

The prices of some purchases also surprised the market. Analysts at Jefferies noted that the scandium deal with Rio Tinto—for roughly 6 tonnes of scandium oxide—was priced “higher than market expectations.”

The DLA is considering 3,000 tonnes of antimony for the stockpile, compared with total U.S. consumption of 24,000 tonnes estimated by USGS, the FT said. The amount would be enough to sustain the country in a national emergency and allow US Antimony to continue producing in a volatile sector, it added.