Trump administration plans $12bn critical minerals stockpile to offset China supply risk — initiative to create 60-day reserve of rare earths for electronics manufacturing

The Trump administration will soon launch a $12 billion critical minerals stockpile designed to insulate U.S. manufacturing from supply disruptions tied to China’s dominance of mining and refining. According to sources cited by Bloomberg, the initiative, known as Project Vault, will provide a roughly 60-day emergency buffer for key minerals used across electronics, automotive, aerospace, and energy supply chains.

Procurement of the stockpile will primarily be financed through a $10 billion, 15-year loan from the U.S. Export-Import Bank, supplemented by around $1.67 billion in private capital. The bank is expected to vote later today on whether to authorize the 15-year loan, which is more than double the net-largest deal it has ever issued, while President Trump is scheduled to meet with General Motors CEO Mary Barra and mining magnate Robert Friedland.

Commodity traders Hartree Partners, Traxys North America, and Mercuria are understood to be managing procurement and inventory, while participation is open to manufacturers that are willing to commit to fixed-price purchase and repurchase agreements. According to a senior administration official, the project is already “oversubscribed because investors are attracted by a credit-worthy group of manufacturers.”

Based on what we know so far, Project Vault seems like it will function similarly to the existing U.S. Strategic Petroleum Reserve, but instead focusing on minerals and other strategically important elements with high price volatility. Under Project Vault, materials could be drawn down during periods of acute disruption, subject to the understanding that participating companies will be required to replenish inventories as supplies recover, thereby keeping the stockpile intact. In the case of a major supply disruption, the officials say that manufacturers will be able to access the full inventory.

Although the U.S. already has a national stockpile of minerals for the defense-industrial sector, it doesn’t have one for civilian needs. Gallium and germanium, for example, are critical inputs for semiconductors used in the likes of power electronics and RF components, while rare earth elements are found in the magnets that appear in everything from hard drives to industrial motors.

China has repeatedly tightened controls on exports of gallium, germanium, graphite, and other dual-use materials, using licensing regimes and approvals as leverage in broader trade disputes. While some restrictions were eased late last year, the underlying concentration of mining and processing capacity has not changed, leaving U.S. manufacturers heavily exposed to Chinese policy shifts.

Last month, a bipartisan group of legislators introduced a bill to create a $2.5 billion stockpile of critical minerals in a bid to stabilize market prices and encourage domestic mining and refining. According to the bill, China has moved to “weaponize its influence over prices and volumes in the contest for access to critical minerals."

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