US Launches $12B Rare Earth Reserve to Counter China
King TenThe US commits $12B to a rare earths reserve, "Project Vault," directly challenging China's market dominance.
The Trump administration is deploying nearly $12 billion to establish a strategic reserve of rare earth elements, creating a national stockpile designed to challenge China's dominance over the critical metals market.
Announced by President Donald Trump on Monday, the initiative, dubbed "Project Vault," aims to protect U.S. manufacturers in the automotive, electronics, and defense sectors from future supply chain disruptions.
President Donald Trump announces the 'Project Vault' initiative for a strategic rare earths reserve from the Oval Office.
The Strategic Rationale for a National Stockpile
The move is a direct response to trade tensions last year, during which the Chinese government restricted exports of rare earths—essential components for everything from jet engines and radar systems to electric vehicles and smartphones.
"We don't want to ever go through what we went through a year ago," Trump stated, alluding to the trade showdown with China. He added that the situation "did work out" in the end.
This new reserve functions similarly to the national petroleum reserve, creating a buffer against geopolitical leverage. China currently accounts for approximately 70% of the world's rare earths mining and a staggering 90% of global processing, giving it significant control over the supply chain.
Funding and Financial Structure
"Project Vault" will be seeded with significant government and private-sector funding:
• A $10 billion loan from the U.S. Export-Import Bank.
• Nearly $1.67 billion in private capital.
The government-backed loan has a 15-year term. President Trump noted that he expects the government to ultimately profit from the loan used to start the reserve.
This financial commitment builds on previous U.S. government support for the sector, which includes stakes in the rare earths miner MP Materials and financial backing for companies like Vulcan Elements and USA Rare Earth.
Diplomatic and Industry Collaboration
The strategic reserve is set to be a central topic at an upcoming ministerial meeting on critical minerals hosted by Secretary of State Marco Rubio on Wednesday. Vice President JD Vance is scheduled to deliver the keynote address to officials from several dozen European, African, and Asian nations.
According to a statement from the State Department, the meeting aims to "create momentum for collaboration" among participating nations to secure reliable access to rare earths. Several bilateral agreements to coordinate and improve supply chain logistics are also expected to be signed.
President Trump announced the initiative from the Oval Office, joined by General Motors CEO Mary Barra and mining industry billionaire Robert Friedland, alongside other administration officials and congressional leaders. The creation of the reserve was first reported by Bloomberg News.
