Trump Unveils $12B Project Vault for Critical Minerals Security
On Monday, US President Donald Trump unveiled a $12 billion initiative aimed at creating a stockpile of essential minerals utilized in defense, technology, and manufacturing. The initiative seeks to diminish the United States’ reliance on China for rare earth elements and other essential metals, as reported. The initiative, known as ‘Project Vault’, was revealed during Trump’s statements at the White House. He stated that supply disruptions have consistently impacted American companies. “For years, American businesses have risked running out of critical minerals during market disruptions,” Trump stated. “Today, we’re launching what will be known as Project Vault to ensure that American businesses and workers are never harmed by any shortage.” Project Vault represents a collaboration between the public and private sectors aimed at acquiring and storing essential minerals and rare earth elements. Gallium and cobalt are among the materials that are crucial for contemporary technology and defense equipment. It will merge $1.67 billion in private seed funding with an additional $10 billion from the US government’s Export-Import Bank.
Cobalt plays a crucial role in rechargeable batteries and jet engines for military aircraft, underscoring its strategic significance. Companies will make a preliminary commitment to purchase materials at a predetermined inventory price in the future. They will also incur certain upfront fees. In light of these commitments, companies are able to provide Project Vault with a list of the materials they require. The project will subsequently acquire and store those materials. Manufacturers will incur a carrying cost that encompasses loan interest and storage expenses. Companies will be permitted to utilize their stored materials, provided they replenish what they extract. A key feature of the plan is that companies must agree to repurchase the same amount of materials in the future at the same price. The administration is confident that this measure will contribute to a reduction in price volatility within the market.
Over a dozen companies have already become part of the initiative. Among the companies listed are General Motors, Stellantis, Boeing, Corning, GE Vernova, and Google. Three global commodities trading firms — Hartree Partners, Traxys North America, and Mercuria Energy Group — will manage the procurement of raw materials for the stockpile. The US currently has a mineral stockpile designated for defense requirements, yet lacks one for civilian industries. In recent years, the government has made direct investments in domestic mining and processing companies to enhance local production. The administration has entered into cooperation agreements with nations including Australia, Japan, and Malaysia. It intends to advocate for increased partnerships at a global summit in Washington on Wednesday. The project resembles the US Strategic Petroleum Reserve, which maintains emergency oil supplies. However, rather than crude oil, Project Vault will concentrate on minerals.
These minerals find application in products including smartphones, batteries, jet engines, and electric vehicles. The stockpile is anticipated to encompass rare earths, critical minerals, and other strategically significant elements, the prices of which can fluctuate dramatically. This initiative underscores Trump’s wider strategy to diminish US reliance on China, which holds a dominant position in the global production and processing of essential minerals. The minerals are crucial for sectors including automotive, aerospace, and energy. Last year, the tightening of export controls on certain materials by China illuminated supply risks, compelling some US manufacturers to reduce production.
