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WASHINGTON – In a strategic move to counteract China’s influence over the global supply of rare earth elements, the Trump administration is set to invest nearly $12 billion to build a significant reserve of these vital minerals. This initiative aims to mitigate China’s leverage in trade negotiations due to its dominant control over these crucial resources.
On Monday, the White House announced the launch of “Project Vault,” which will kick off with a $10 billion loan from the U.S. Export-Import Bank, supplemented by approximately $1.67 billion in private investments. The establishment of this reserve is intended to protect manufacturers of automobiles, electronics, and other industries from potential supply chain disruptions.
Last year, during trade discussions prompted by President Donald Trump’s imposition of tariffs, China limited the export of rare earth elements essential for producing jet engines, radar systems, electric vehicles, laptops, and smartphones.
China currently accounts for about 70% of the world’s rare earth mining and 90% of processing, effectively controlling the sector. This dominance has driven the U.S. to seek alternative sources and establish a stockpile akin to the national petroleum reserve.
The proposed loan is structured over a 15-year term. In efforts to bolster domestic capabilities, the U.S. government has previously acquired stakes in MP Materials, a key player in rare earth mining, and has extended financial support to companies like Vulcan Elements and USA Rare Earth.
Bloomberg News was the first to report the creation of the rare earths strategic reserve.
Trump is scheduled on Monday to meet with General Motors CEO Mary Barra and mining industry billionaire Robert Friedland.
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