TLDR
- President Trump plans to create a $12 billion critical minerals stockpile called Project Vault to reduce US dependence on Chinese rare earths
- The initiative combines $1.67 billion in private funding with a $10 billion loan from the US Export-Import Bank
- Over a dozen companies including GM, Boeing, Google, and Stellantis have signed on to participate in the program
- The stockpile will store minerals like gallium and cobalt used in products from iPhones to jet engines for commercial manufacturers
- Companies commit to purchasing materials at fixed prices to help stabilize market volatility and protect against supply disruptions
President Donald Trump is launching a $12 billion strategic stockpile of critical minerals to help US manufacturers reduce their reliance on Chinese supplies. The initiative, called Project Vault, represents the first stockpile of its kind for the American private sector.
The program will combine $1.67 billion in private capital with a $10 billion loan from the US Export-Import Bank. The loan requires board approval and would be the largest in the bank’s history, more than double its previous record.
The stockpile will focus on minerals essential to industrial manufacturing, including rare earths, gallium, and cobalt. These materials are used in products ranging from smartphones and batteries to jet engines and electric vehicles.
More than a dozen companies have already joined the effort. Participating firms include General Motors, Stellantis, Boeing, Corning, GE Vernova, and Google.
Three commodities trading houses will handle the actual purchases of raw materials. Hartree Partners, Traxys North America, and Mercuria Energy Group have signed on as procurement officers for the stockpile.
How Project Vault Works
The program allows manufacturers to insulate themselves from price swings without maintaining their own stockpiles. Companies make initial commitments to purchase materials at specified prices and pay upfront fees.
They can then provide Project Vault with a list of needed materials. The project procures and stores these materials, charging carrying costs for loan interest and storage expenses.
Manufacturers can draw down their material supplies as long as they replenish them. In major supply disruptions, they can access their entire allocation.
A key design element requires companies to commit to repurchasing the same amount of materials at the original price. This mechanism aims to help stabilize prices and reduce market volatility.
Background on US Mineral Dependence
The US already operates a national stockpile of critical minerals for defense purposes. However, no similar stockpile exists for civilian commercial needs.
China dominates global production and processing of critical minerals. Last year, Beijing tightened export controls on certain materials, forcing some US manufacturers to reduce production.
The nickel market saw historic price surges after Russia invaded Ukraine. Buyers feared losing access to supplies from Russia, a major supplier.
Trump has already signed cooperation agreements with Australia, Japan, Malaysia, and other countries on critical minerals. A summit with dozens of countries is scheduled for Wednesday in Washington to pursue additional partnerships.
Rare-earth stocks jumped in premarket trading on the news. USA Rare Earth, Critical Metals, United States Antimony, and NioCorp Developments all saw gains.
Trump is meeting Monday with GM CEO Mary Barra and mining billionaire Robert Friedland. The meeting brings together both producers and users of critical minerals.
The Export-Import Bank board is voting Monday to authorize the 15-year loan.
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