US restarts $500M tender as cobalt prices rise

US Defense Department to Renew Cobalt Bids

The US Department of Defense plans to reissue updated bids for cobalt, potentially worth up to $500 million, by the end of November 2025. Winning bids are anticipated in early February 2026, as reported.

The Defense Logistics Agency (DLA) initially sought offers for around 7,500 tonnes of cobalt over five years back in mid-August. However, the bid was canceled in mid-October due to “unresolved issues with the statement of work,” notably after several parties missed deadlines.

DLA had sought proposals for alloy-grade cobalt from three major companies: Canada’s Vale SA, Japan’s Sumitomo Metal Mining, and Norway’s Glencore Plc’s Nikkelverk plant. Suppliers were asked to suggest fixed prices for their supplies over five years, with only one update made last month affecting a Vale brand.

Over the past few years, cobalt prices have hit historic lows, especially in early 2025, primarily from a surge in supply from the Democratic Republic of the Congo (DRC), which produces 80% of the world’s cobalt. This occurred alongside a drop in demand from the electric vehicle sector.

Last year, copper production in the DRC increased nearly 40%, and the capital city, Kinshasa, implemented a new quota system in October, replacing an earlier ban from February. The approved annual limit of 87,000 tons represents about half of the DRC’s total export volume reported in 2024.

In the battery industry, cobalt use for electric vehicles has surpassed other applications, like aerospace alloys, influencing the market significantly. Currently, cobalt sulfate prices, which are crucial for China’s EV battery supply chain, are up 335% compared to the beginning of the year, averaging 11,932 tonnes in October, translating to about $58,200 per tonne based on 100% cobalt content. Still, this price falls short of the over $90,000 per tonne peak seen in March 2022.

Looking ahead, cobalt prices may remain elevated or even increase further due to the quota system being introduced in 2026 and 2027. Additionally, the US government’s return to the market for the first time since 1990 could lend further support.

Last month, the CEO of China’s CMOC Group, the largest cobalt producer globally, expressed concern that the current cobalt levels could provoke demand destruction and promote substitution—highlighting a persistent trend for cobalt users.