Pentagon Scraps $300 Million Lithium Tender for Defense Stockpile

The U.S. Department of Defense has abandoned plans to purchase up to $300 million worth of lithium carbonate for the national strategic stockpile, according to a recent report. The Defense Logistics Agency, responsible for the defense supply chain, canceled the tender effective August 3, 2026. The bidding period had been extended twice, first from July 17 to July 30, and then from July 30 to August 5.

Initially seeking offers for nearly 36 million pounds of battery-grade lithium carbonate over five years, the contract was expected to be worth up to $300 million. However, the cancellation of this tender suggests the Administration may be facing challenges in securing critical minerals for defense and strategic industries at fixed prices.

This is not the first setback; last year, the Defense Logistics Agency also canceled a $500 million cobalt tender. The difficulties in procuring critical minerals at fixed prices signal potential hurdles for the U.S. Administration. Lithium carbonate prices have risen by around 20% so far this year, while futures in China have dipped to the lowest level in five months due to some mines restarting and concerns over a potential glut in the coming months.

China's EV battery leader, Contemporary Amperex Technology Co CATL, restarted its Jianxiawo lithium mine in June, contributing to the price drop. Analysts at Mysteel anticipate a 7.6% increase in Chinese lithium carbonate production in August compared to July due to improved feedstock arrivals from Africa and peak seasonal output from salt lakes.