Nickel and Cobalt Become Strategic Defence Assets Amid Supply Risks
The demand for nickel and cobalt is rising sharply, driven by defence and energy needs. These metals are now seen as vital for national security rather than just industrial materials. Governments are taking steps to secure supplies amid growing geopolitical risks.
First Atlantic Nickel Corp. has recently joined the Defense Industrial Base Consortium (DIBC), a move that highlights the strategic importance of these resources. Meanwhile, the market for nickel-cobalt alloys is set to nearly double in value within the next decade, reaching an estimated $35-36 billion. Nickel and cobalt play a key role in modern defence systems. Their alloys are essential for jet engines, missile components, and naval equipment because of their ability to withstand extreme heat and stress. The US Defense Industrial Base Consortium (DIBC) has even listed nickel among 13 critical minerals in its latest project proposals.
Yet supply remains uneven and risky. Indonesia dominates nickel production, while the Democratic Republic of Congo (DRC) controls over 76% of global cobalt output. Both regions face instability, including export restrictions, corruption, and environmental disputes. These challenges create vulnerabilities for defence industries that rely on these metals for batteries, electronics, and advanced weaponry.
To strengthen domestic supply chains, companies are expanding production. MP Materials Corp. has chosen Northlake, Texas, as the location for a new large-scale rare earth magnet manufacturing plant. Meanwhile, REalloys Inc. has appointed Joe Kasper as Chair of its Advisory Board, signalling a push to develop nickel-cobalt alloy projects like the Pipestone XL Awaruite initiative. This project targets two critical defence sectors: strategic materials and energy storage.
The aerospace and defence industries remain the biggest consumers of these alloys. Their growing demand reflects the need for high-performance materials in military technology, from fighter jets to missile defence systems. The push for secure nickel and cobalt supplies will shape defence manufacturing in the coming years. With the market for these alloys expected to expand significantly, companies and governments are investing in domestic production and strategic partnerships. These efforts aim to reduce reliance on unstable regions while ensuring a steady flow of materials for critical military applications.
