The United States government is planning a bold new industrial move called “Project Vault” which is a $12 billion plan to build a strategic stockpile of critical minerals that the country now relies on China for. The aim is to reduce the risk that comes from depending too much on one foreign supplier, and to protect key American industries like car manufacturing, electronics and defense.
As per reports, Donald Trump said that “For years, American businesses have risked running out of critical minerals during market disruptions.” he further added that, “today, we’re launching what will be known as Project Vault to ensure that American businesses and workers are never harmed by any shortage.”
How will Project Vault work?
The US will put together $1.67 billion in private investment and about $10 billion in loans from the US Export-Import Bank (EXIM) under the plan. Reports say that those funds will be used to buy and store large amounts of rare earths and other essential minerals materials used in things like smartphones, electric vehicle batteries, jet engines, radars and more.
The whole idea is similar to the Strategic Petroleum Reserve that the US already uses to store oil for emergencies. However, Project Vault is focused on minerals and metals that are critical to modern life, especially those that are hard to get outside China.
Project Vault required to counter china
China currently controls a huge share of the global market for these materials, especially in rare earth mining and processing, up to 70 % of mining and 90 % of processing worldwide. That dominance gives China real leverage in trade and supply discussions. That’s one reason US officials want to build a stockpile that would provide a 60-day buffer of supplies for American companies in case of supply shocks or political tensions.
According to reports, more than a dozen major companies are already on board to participate. These include General Motors, Stellantis, Boeing, Corning, GE Vernova, and Google, among others. Commodities trading firms like Hartree Partners, Traxys North America, and Mercuria Energy Group will help source and manage the minerals.
Project Vault is a bigger trade strategy
The structure of the stockpile means that manufacturers can pay upfront fees and reserve materials, with the right to draw down supplies in emergencies. The companies however, need to commit to replenish them later at agreed prices. This setup is meant to dampen price swings and protect companies from volatile markets.
Project Vault is part of a broader effort by the Trump administration to secure supply chains, and reduce reliance on China, and strengthen the US industrial independence. Officials say it could take years to build out, however, supporters believe it’s a major strategic step toward securing the raw materials that are critical to the future of tech and defense industries.
