The initiative forms part of a larger push to secure critical minerals for the US industrial defence base.

The US Defense Logistics Agency (DLA) plans to award two long-term, five-year contracts for the supply of vanadium pentoxide (V₂O₅), aimed at supporting defence requirements and the deployment of vanadium flow batteries.

The tender covers up to 2.88kt (~14% of the estimated US annual vanadium consumption) over the contract period (with a guaranteed minimum value of US$1M and a maximum ceiling of US$125M) and requires material purity of at least 99.0% V₂O₅.

As Project Blue stated previously, the USA is heavily dependent on vanadium imports, which account for up to 40% (as of 2025) of the country’s total vanadium consumption. Most of the local supply provided by AMG Vanadium and US Vanadium is derived from secondary production, predominantly used to produce ferrovanadium. The USA, therefore, needs to import high-purity vanadium supplies from overseas.

The USA’s imports of vanadium pentoxide are sourced entirely from South Africa and Brazil, in equal volumes. Meanwhile, the leading suppliers of ferrovanadium are Canada (up to 50% of supply) and EU countries (approximately 40%), primarily Czechia.

In 2025, the White House administration imposed reciprocal tariffs on imports from all key vanadium-supplying countries: 30% on South Africa, 50% on Brazil, 35% on Canada, and 30% on the EU. Although some of these tariffs have been revised several times, challenged, or may be reduced if bilateral trade agreements are approved (as in the case of Canada and the EU), these measures nevertheless contribute to the high price premium in the US market. Thus, the price premium for ferrovanadium in the USA over Europe stood at 23% at the end of 2025, compared to an average of 9% from 2022 to 2024.

Given the level of import reliance, trade tariffs, and elevated price premiums, the DLA tender highlights the strategic importance of securing reliable, high-purity vanadium supplies to support US defence requirements and emerging energy storage technologies.