In The Fellowship of the Ring, Book Two, IV A Journey in the Dark, Gandalf explains:
The wealth of Moria was not in gold and jewels, the toys of the Dwarves; nor in iron, their servant. Such things they found here, it is true, especially iron; but they did not need to delve for them: all things that they desired they could obtain in traffic. For here alone in the world was found Moria-silver, or true-silver as some have called it: mithril is the Elvish name. The Dwarves have a name which they do not tell. Its worth was ten times that of gold, and now it is beyond price; for little is left above ground, and even the Orcs dare not delve here for it. The lodes lead away north towards Caradhras, and down to darkness. The Dwarves tell no tale; but even as mithril was the foundation of their wealth, so also it was their destruction: they delved too greedily and too deep, and disturbed that from which they fled, Durin’s Bane. Of what they brought to light the Orcs have gathered nearly all, and given it in tribute to Sauron, who covets it.
Why did Sauron desire mithril? What did he use it for?