More than a year ago, Congress passed a $40 billion Ukraine aid package. Lawmakers allocated a miniscule portion of that package ― less than 2% ― to expedite munitions production and expand access to critical minerals via the Defense Production Act.
The Pentagon is now starting to make use of the bill’s $600 million appropriation for Defense Production Act funding.
As it expands munitions production, the department hopes that these funds will also help onshore critical defense supply chains and lessen the industrial base’s reliance on Russia and China.
The Pentagon’s Defense Manufacturing Capability Expansion and Investment Prioritization office, which oversees DPA grants, issued several grants in recent months as part of a series of awards from the Ukraine aid bill. The grants kicked off in April, with a $215.6 million award for Aerojet Rocketdyne to modernize its complex rocket propulsion systems facilities in Arkansas, Alabama and Virginia with the aim of speeding up the production of munitions sent to Ukraine like Javelin anti-tank and Stinger anti-aircraft missiles.
Then came a June 16 award for $45.5 million to bolster high-priority aluminum production in Iowa. That award went to Arconic to expand its infrastructure and increase high-priority aluminum production capacity at its Iowa facility, including the installation of a new furnace.
Russia controls more than 75% of the global market for high-priority aluminum, which is needed to make jets and tactical ground vehicles.
“There has to be pretty high purity, otherwise bad things happen, like it could crack,” Anthony Di Stasio, the director of the Defense Manufacturing Capability Expansion and Investment Prioritization office, told Defense News in a Monday interview. “So we sent out a signal to industry that we wanted to expand production of high-priority aluminum in the United States.”
The Pentagon also announced a $13.8 million award on June 20 to The Timken Company, the only supplier of ball bearings that meet Defense Department standards. There is no national shortage of ball bearings, ubiquitous in every sort of machine. But conditions like rapid temperature fluctuations mean that ball bearings must be much tougher in weapons systems, whether that’s artillery, rockets, jets or guidance systems.
“The temperature cycling for things on missiles — and then obviously anything that comes out of a gun — is going to get real hot, real fast for a really short period of time,” Di Stasio said. “Through [the] Defense Production Act [for fiscal 2024], hopefully we’re going to try to generate interest for a second supplier to be a second qualified source for [Defense Department] ball bearings.”
De Stasio’s office also announced on June 15 another $15 million award from the Ukraine aid bill for a feasibility study to mine cobalt in Idaho — a critical mineral in the defense-industrial base that China nearly monopolizes. Those funds will allow Jervois Mining USA to test and drill at its Idaho mine in order to assess how much cobalt it contains.
“A lot of cobalt was getting refined in either China or the Ukraine, or some place that it can’t be refined anymore,” Di Stasio said. “What most people don’t know is every hard-target penetrator that we use in the military is a tungsten-cobalt alloy. So if we want to shoot through anything hard, we need cobalt.”
That includes armor, tanks, armored planes and radar, Di Stasio added.
Even before Russia invaded Ukraine in February 2022 and curtailed global cobalt supplies, China dominated the market worldwide. China holds a majority ownership — 70% — of the cobalt mined in the Democratic Republic of Congo, the world’s largest supplier of the metal.
Di Stasio said close allies like Canada and Australia are also exploring deposits for the extraction of critical minerals like cobalt. The Defense Production Act already allows the Pentagon to give grants to Canadian companies. President Joe Biden and the Pentagon recently asked Congress to make Australia and the U.K. eligible for Defense Production Act grants, arguing that doing so will also advance the trilateral AUKUS agreement.
The Pentagon hopes this will allow Australian and British companies to participate in collaborative efforts at U.S. campuses that aim to bring together businesses from different parts of the supply chain. Di Stasio’s office plans to open campuses across the country, starting with a pilot munitions one in Texas. There are also plans to open a microelectronics campus for printed circuit boards, and another for batteries.
“I want their [intellectual property] protected but [for] them to be able to combine technology,” Di Stasio explained. “If you have someone doing 3D-printed rocket cases and someone else has a new whiz-bang rocket propellant, they can be on the same campus testing it.”
In addition to the pilot campuses, Di Stasio’s office expects to make about $200 million in awards funding streams for U.S. companies to manufacture 27 critical chemicals that are several steps down the supply chain for manufacturing propellants and explosives.
Most of these chemicals come from China. The hope is that these awards — appropriated through separate, non-Ukraine-related funding streams — will generate another $200 million in private sector investments.
“We were appropriated about $250 million and given a very short, very specific mission: If it goes into a weapon, we don’t want it coming from China,” Di Stasio said.
He expects most of these awards will be distributed by October, and that they will eventually allow the U.S. to onshore 23 to 25 of these critical chemicals.
Source: Defense News
