Donald Trump has announced the creation of a critical mineral stockpile worth around $12bn, a stockpile that could counter China’s ability to use its dominance of hard-to-process metals as leverage in trade negotiations.
“Today we are launching what is known as Project Vault to ensure that there will be no shortages for American businesses and workers,” Trump said Monday at the White House.
He compared it to the Strategic Petroleum Reserve (SPR), which was created in the 1970s when the Arab oil embargo led to gas shortages.
U.S. Interior Secretary Doug Burgum said 11 additional countries will be announced for the initiative this week.
The project will initially be financed by a $10bn loan from the US Export-Import Bank and about $1.67bn in private capital. Minerals held in reserve help protect manufacturers of vehicles, electronics and other goods from any supply chain disruption.
Due to Trump’s tariffs during last year’s trade talks, China has imposed restrictions on the export of rare earths Essential for jet engines, radar systems, electric vehicles, laptops and phones.
“We never want to go through what we went through a year ago,” he said in an apparent reference to a showdown with Trump. Chinaadding at the end, “It worked.” The president said he hoped the government would profit from the loan used to start the reserve.
China controls 70% of the world’s rare earth mining and 90% of the world’s rare earth processing. This stranglehold on the sector caused the US to develop alternative sources of the element, creating reserves equivalent to the national reserve for petroleum.
The strategic reserve is expected to be a highlight of Secretary of State Marco Rubio’s key minerals cabinet meeting at the State Department on Wednesday.
Vice President JD Vance is scheduled to deliver the keynote address at the meeting, which will be attended by officials from several dozen European, African and Asian countries. The meeting will also see the signing of several bilateral agreements to improve and coordinate supply chain logistics.
The State Department said in a statement announcing the meeting that “the meeting will build momentum for cooperation” among participants to gain access to rare earths.
The reserve is funded by government backed debt for a period of 15 years. The US government has previously taken stakes in rare earths miner MP Materials, as well as provided financial support to Vulcan Elements and the USA Rare Earth Company.
Trump announced the reserve alongside General Motors CEO Mary Barra and mining industry billionaire Robert Friedland in the Oval Office, along with other members of his administration and congressional leaders.
With the Associated Press and Reuters
