FILE PHOTO: A sample of rock drilled at a cobalt mining site operated by Jervois Global is seen at a facility, west of Salmon, Idaho, May 16, 2024. REUTERS/Carlos Barria/File photo

(Reuters) -The U.S. is seeking to procure cobalt worth up to $500 million for defense stockpiles amid the country's move to boost its critical mineral supplies.

Companies have been scrambling to source rare earths after China imposed restrictions, leading to a 75% drop in rare earth magnet exports from the country in June and causing some auto companies to suspend production.

U.S. President Donald Trump in March invoked emergency powers to boost domestic production of critical minerals as part of a broad effort to offset China's near-total control of the sector.

In July, Reuters reported that the White House tapped a former mining executive, David Copley, to head an office at the National Security Council focused on strengthening supply chains.

According to the tender document published by the U.S. Department of Defense and the Defense Logistics Agency (DLA) on Wednesday, they are looking for offers for alloy-grade cobalt of about 7,480 tonnes over the next five years.

Cobalt, mostly imported by the U.S., is used in batteries, a component in nickel superalloys for high temperature sections of jet engines and industrial gas turbines, among others.

However, the defense department was seeking offers from only three companies - units of Vale SA in Canada, Japan's Sumitomo Metal Mining and Norway's Glencore Nikkelverk.

The document also said the purchase amount can range from between $2 million and $500 million in the five-year period.

(Reporting by Tanay Dhumal in Bengaluru; Editing by Maju Samuel)