Industry analysts have stated that the new “Project Vault” critical minerals stockpile, launched by the White House and the U.S. Export-Import Bank, is “absolutely” necessary. However, they view it as merely the initial phase of a multi-year endeavor to secure vital resources, including rare earths.
The announcement on February 2nd regarding the plans for this emergency national stockpile of specific critical minerals follows an unusual move by the Trump administration over the past 10 months: direct investments in several U.S. and Canadian companies involved in critical minerals mining and processing.
While supply chain disruptions first appeared during the COVID-19 pandemic, the commencement of a tariff trade war with China last year led to the “weaponization” of China’s decades-long dominance in critical minerals mining, processing, and magnet-manufacturing supply chains. Charles Boakye, an energy sustainability and transition analyst at Jefferies, noted that particular minerals, especially the 17 rare earth metals, are crucial for manufacturing everything from military equipment and automobiles to high-powered computing and data centers.
“Is [Project Vault] needed? Absolutely,” Boakye told . “Will it be effective? I think we need to wait and see. The initial signs are definitely promising, but the bottleneck is not just the mining and sourcing; it’s also the processing. Even if the U.S. can stockpile many of these materials, how and who is going to do the processing depending on the end-use applications?”
Boakye characterized the stockpile as a “first big step of many” required to break China’s control over the next three to seven years, at a minimum. “This is not a nationalization of U.S. minerals, but it comes very close to that. It’s state capitalism and it’s industrial policy.”
Some have likened the project to the 50-year-old U.S. Strategic Petroleum Reserve, which currently stores 415 million barrels of crude oil in underground salt caverns in Texas and Louisiana. That reserve was established in response to the 1973 Arab oil embargo.
Commodities trading houses that have committed to procuring the minerals for the stockpiles include Hartree Partners, Mercuria, and Traxys.
President Trump announced that the initial $12 billion effort for the U.S. Strategic Minerals Reserve includes a $10 billion direct loan from the Ex-Im Bank and $2 billion in private sector investment.
“For years, American businesses have risked running out of critical minerals during market disruptions,” Trump stated in a brief video announcement. “Just as we have long had a Strategic Petroleum Reserve … we’re now creating this reserve for American industry, so we don’t have any problems.”
A Sustained Initiative
As Ex-Im Chairman John Jovanovic further explained, “Project Vault is designed to support domestic manufacturers from supply shocks, support U.S. production and processing of critical raw materials, and strength America’s critical minerals sector.”
A temporary one-year truce was agreed upon after China began to restrict certain magnets and minerals last year, in response to U.S. tariffs and bans on specific AI chips.
In the interim, the U.S. government has made investments in two U.S. rare earths miners and specialty magnet manufacturers, MP Materials and USA Rare Earth.
Regarding the U.S. government’s other investments in critical minerals, the Trump administration has invested in two Canadian entities, Lithium Americas and Trilogy Metals—both of which are developing U.S. projects—and in North Carolina–based magnets manufacturer Vulcan Elements. The government also holds an agreement with Indiana-based ReElement Technologies, a critical minerals processor, for the rights to purchase stock.
Boakye stated that he does not believe the U.S. will abandon its efforts, even if a longer-term deal on trade and critical minerals is eventually reached between the U.S. and China.
“It’s not something that is going to immediately change that ability for China to weaponize its dominance,” Boakye said. He added that this is part of a broader effort requiring more partnerships with Canada, the European Union, Australia, and other U.S. allies to develop mining and processing facilities worldwide.
“We are in the midst of an economic war.”