WASHINGTON – The United States government is embarking on an extensive project to build up a strategic reserve of rare earth elements valued at close to $12 billion. The initiative, recently confirmed by the White House under the name “Project Vault,” aims to reduce reliance on China’s overwhelming control of the rare earth market, thereby lessening risks related to supply interruptions for industries heavily dependent on these materials.
Project Vault will be financed initially through a $10 billion loan from the U.S. Export-Import Bank, supplemented by approximately $1.67 billion in private-sector capital. The stockpile will serve as a protective buffer for manufacturers producing automobiles, electronic devices, and other goods that require rare earth elements in their production processes.
Rare earth elements are essential for a variety of advanced technologies, including jet engines, radar equipment, electric vehicles, laptops, and smartphones. In the previous year, the Chinese government leveraged its export controls on these minerals during trade negotiations triggered by tariff disputes, underscoring the vulnerability of supply chains reliant on China.
China dominates the global rare earths industry, accounting for about 70% of mining operations and roughly 90% of processing capacity worldwide. This outsized market share has created a strategic leverage point that the United States aims to counteract by building a stockpile reminiscent of the nation’s petroleum reserves.
The repayment period for the loan extended to support this initiative is set for 15 years. Concurrently, the U.S. government has taken prior steps to invest directly in the rare earth sector, including acquiring stakes in MP Materials, a major rare earths mining firm, and backing companies such as Vulcan Elements and USA Rare Earth.
This strategic effort comes amid ongoing dialogues in Washington, with President Donald Trump scheduled to meet with General Motors CEO Mary Barra and mining magnate Robert Friedland, highlighting the administration’s focus on strengthening domestic mineral supply chains.