US Military Scraps US$300 Million Lithium Carbonate Purchase

The US Department of Defense (DOD) has abruptly canceled a previous tender to purchase up to US$300 million of battery-grade lithium carbonate, Bloomberg reported.

According to a procurement notice updated on Monday (August 3), the Defense Logistics Agency (DLA) scrapped its solicitation for 35.64 million pounds, which tallies roughly 16,170 metric tons, of the battery metal.

Initially launched on July 2, the tender sought fixed-price supply contracts extending over a five-year period to supply the National Defense Stockpile.

Before the sudden withdrawal, the deadline for supplier bids had been delayed twice. An email sent to the department requesting comment outside regular office hours went unanswered.

The reversal marks another stumble in federal efforts to build defensive material reserves. The DLA, responsible for securing metals for US military and industrial needs, similarly canceled a cobalt tender last year.

The lithium purchase was intended to be a central component of a national push to reinforce the US’ critical minerals pipeline.

In February 2026, the White House established Project Vault, a US$12 billion public-private stockpiling initiative anchored by a US$10 billion loan from the US Export-Import Bank and nearly US$2 billion in private capital.

The project allows original equipment manufacturers to identify required grades of material and pay commitment fees for emergency access.

However, executing the strategy introduces a paradox for Western governments. Because the US and Europe severely lack domestic capacity to refine raw ore, they must stockpile processed, battery-ready chemicals.

With global lithium carbonate prices surging nearly 20 percent in China so far this year amid volatile trading, economic and supply chain leverage remains heavily concentrated in Beijing.

That leverage is increasingly managed through export controls. Beijing now requires exporters to submit granular details regarding the buyer, end-use, and material specifications before granting approval.

This regulation hands the Chinese government a de facto veto over sensitive transactions, allowing it to selectively choke the exact shipments Western nations need to build their reserves.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.