US launches $12 billion 'Project Vault' to secure critical minerals supply and counter China

President Donald Trump has announced a $12 billion initiative, ‘Project Vault’, aimed at creating a civilian reserve of critical minerals to bolster US manufacturing and reduce dependence on China amid geopolitical tensions.

President Donald Trump has launched a $12 billion initiative to create a civilian reserve of critical minerals intended to insulate US manufacturers from supply disruptions and to blunt Beijing’s dominance of key supply chains.

The programme, unveiled as “Project Vault”, pools public and private financing to purchase and hold supplies of rare earths and other strategic materials used in electric vehicles, high-tech manufacturing and some military applications. The White House said the effort will combine a large loan from the US Export‑Import Bank with private capital; reporting on the plan cites slightly different tallies of the private contribution, but all accounts place the total financing at roughly $12 billion. According to Bloomberg and other outlets, Ex‑Im voted to approve the government loan that forms the bulk of the funding.

Trade houses have been tapped to execute the buying and storage strategy. Industry reports name Hartree Partners, Traxys North America and Mercuria Energy Group as the firms expected to source and allocate raw materials for the reserve. The Biden‑era National Defense Stockpile remains focused on armed forces needs; officials have positioned Project Vault as complementary, serving civilian manufacturers including major companies reportedly in line to participate such as General Motors, Stellantis, Google, Boeing and Corning.

The timing of the announcement coincides with a high‑level ministerial meeting hosted in Washington this week that brings together officials from more than 40 countries to discuss a co‑ordinated minerals market. According to The Guardian and ABC, delegates from Australia, India, Kazakhstan and mineral‑rich African states including the Democratic Republic of Congo are among those expected to attend. The State Department has circulated a draft framework that would ask partners to identify projects able to deliver materials within six months and contemplates market interventions such as price floors to protect suppliers aligned with the United States, Politico reported.

Administration officials have framed Project Vault as part of a broader strategy to reduce dependence on China, which controls the bulk of global rare‑earth processing and a large share of mining for a range of critical inputs. ABC noted that China accounts for an estimated 70% of rare‑earth mining and about 90% of processing. Beijing’s embassy in Washington reiterated a call for adherence to market principles and stable global supply chains, according to a Chinese foreign ministry spokesman quoted by news outlets.

The initiative has prompted a rapid market response. Forbes and other financial coverage reported that shares of rare‑earth companies jumped on the news, reflecting investor anticipation of greater US demand and policy support for domestic suppliers.

But the plan faces both logistical and geopolitical hurdles. Congressional proposals floated in recent months envisaged smaller, independently governed stockpiles; Republican and Democratic lawmakers have differed on design and scale. Reports show some discrepancy over funding details and the mix of public versus private capital, which may affect oversight and governance of the reserve. The Fiscal Times and CBS News summarised the scheme as aiming to stabilise prices and secure supply chains for industry, but offered cautionary context about implementation.

Security and stability in supplier countries also complicate the effort. The DRC, the world’s top producer of cobalt crucial for batteries, remains affected by violence that US officials say is hampering access and development despite a recent peace agreement. US lawmakers and State Department officials have warned that lack of on‑the‑ground stability, limited engagement with civil society and questions about governance could undermine deals and the credibility of partnerships, according to reporting from E&E News and other outlets. Those concerns echo warnings from congressional members who argue that agreements must include measures to protect local communities and ensure political commitments are honoured.

The administration intends to showcase Project Vault as both a commercial buffer and a strategic signal ahead of planned talks between President Trump and Chinese leader Xi Jinping in April. Apart from the stockpile, the White House has been pursuing a suite of measures to bolster domestic supply chains: investing in mineral companies, accelerating permitting for mining and exploring deep‑sea extraction, measures that critics warn could raise environmental and social concerns if not carefully managed.

Officials characterise Project Vault as a pragmatic, market‑based tool to reduce vulnerability to abrupt export controls or price shocks. Yet the plan’s success will depend on reconciling different funding estimates, establishing transparent governance, securing reliable deliveries from partner countries and resolving the security and human‑rights issues that shadow resource development in key producing regions.

Source: Noah Wire Services