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President Donald Trump announced the start of “Project Vault,” an effort the White House says will use nearly $12 billion to create a strategic reserve of rare earth elements. The plan is designed to counter what the administration describes as China’s ability to use dominance in hard-to-process minerals as leverage in trade negotiations, including by limiting exports of material used in jet engines, radar systems and electric vehicles.
Trump said he does not want to “ever go through what we went through a year ago,” referring to the earlier showdown with China during trade talks tied to his tariffs. He added that “it did work out,” and he said he expects the U.S. government to make a profit from the loan being used to launch the reserve.
Under the administration’s announcement, “Project Vault” will initially be funded by a $10 billion loan from the U.S. Export-Import Bank plus nearly $1.67 billion in private capital. Officials said the minerals held in the reserve would help protect manufacturers of autos, electronics and other goods from supply chain disruptions.
The administration’s proposal is set against the backdrop of China’s role in the rare earth supply chain. China accounts for about 70% of the world’s rare earth mining and 90% of global rare earth processing, which officials said can create a chokehold on the sector.
During trade talks last year that were spurred by Trump’s tariffs, the Chinese government restricted exports of rare earths needed for industries that rely on the metals, including military and consumer technology. The administration said the reserve is intended to reduce the impact of similar disruptions by creating an alternative stockpile akin to the national reserve for petroleum.
Officials said the strategic reserve is expected to be a highlight of a ministerial meeting on critical minerals hosted by Secretary of State Marco Rubio at the State Department on Wednesday. Vice President JD Vance will deliver a keynote address, and officials said participants from several dozen European, African and Asian nations plan to attend.
The State Department said in a statement that the gathering “will create momentum for collaboration” among participants to secure access to rare earths. Officials said the meeting is also expected to include the signing of bilateral agreements aimed at improving and coordinating supply chain logistics.
The government-backed loan funding the reserve would run for 15 years. The U.S. government has previously taken stakes in rare earths mining through MP Materials, and it has provided financial backing to companies including Vulcan Elements and USA Rare Earth, according to the announcement.
Trump made the announcement in the Oval Office alongside General Motors CEO Mary Barra and mining industry billionaire Robert Friedland, along with other members of his administration and congressional leaders. Bloomberg News reported earlier on the creation of the rare earths strategic reserve.