Highlights

• CSIS proposes a U.S.-backed cobalt price floor ($16-$32/lb) to stabilize markets distorted by PRC-linked oversupply from the DRC.
• Estimated annual costs range from $65.89M to $277.57M to support domestic projects after U.S. mines shuttered.
• Over 50% of U.S. cobalt demand serves aerospace and defense superalloys, not EVs, reframing cobalt as strategically critical beyond commercial battery cycles, similar to rare earth permanent magnets.
• The proposal normalizes price floors as industrial policy, citing the $110/kg NdPr floor for MP Materials as precedent.
• Success requires addressing permitting, financing, and comprehensive supply chain policy gaps.

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A December 2025 Center for Strategic and International Studies (CSIS) brief (opens in a new tab) by Gracelin Baskaran and Meredith Schwartz argues that a U.S.-backed cobalt price floor could stabilize a market they describe as distorted by strategic oversupply—especially from PRC-linked production in the DRC—and keep Western-aligned projects from being priced out of existence. It’s a serious, mostly evidence-grounded intervention. It also rests on assumptions investors should interrogate.

Where the Diagnosis Lands Cleanly

Based on a Rare Earth Exchanges™ review, CSIS is on a firm footing in describing the volatility problem. The brief notes cobalt prices fell 59.5% from May 2022 to May 2025 (from $41 to $16.62/lb) alongside CMOC’s surge in output—expanding even as prices declined—pushing Western assets off the field.

The most material datapoint for U.S. security planners is blunt: as of December 2025, the United States has no active cobalt mines, after Jervois’s Idaho operation shuttered amid the price crash.

The brief also rightly re-centers cobalt away from EV-only narratives. It states that over 50% of U.S. cobalt demand is driven by the superalloy industry, tied to aerospace and defense applications.

That framing mirrors rare earth permanent magnets: strategic necessity survives commercial fashion cycles.

The Math Is Useful—The Leap Is Bigger

The authors’ price-floor cost model is clear: using 6,000 metric tons of U.S. primary cobalt consumption (13.23M lbs), they estimate annual taxpayer costs of $65.89 ($16 floor), $171.72 ($24), and $277.57 ($32).

The $24 case is positioned as “meaningful” support for restarting domestic projects like Jervois.

What is optimistic about this is the implied sufficiency. A price floor can stabilize revenue expectations; it does not automatically solve permitting drag, financing constraints, restart timelines, or the operational fragility of single-asset stories. Or, for that matter, a lack of a comprehensive, integrated, and durable critical mineral and rare earth element supply chain industrial policy.

CSIS discloses that the brief was made possible through support from the Cobalt Institute.

That doesn’t negate the analysis—which is useful-- but it can naturally steer attention toward supply-side stabilization over harder tradeoffs like substitution and recycling economics.

Why This Matters for Rare Earth Investors

The cobalt paper matters because it normalizes the policy tool, rare earths (via the Trump administration), just pioneered: price floors as an industrial strategy. Although it is important to note that the government has not formally made the price floor standard price point across the sector.  At least not yet.  CSIS even cites the $110/kg NdPr price floor for MP Materials as the template case—then argues cobalt will be more complicated because the U.S. lacks domestic scale.

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