President Trump on Monday established the U.S. Strategic Critical Minerals Reserve, a $12 billion stockpile of minerals that are essential components of a variety of high-tech products, including car batteries and weapons systems.
The effort, known as Project Vault, aims to reduce U.S. dependence on China, which dominates the supply of critical materials, including rare earths, and to stabilize prices for U.S. manufacturers. Currently, China controls about 70% of rare earth mining, and an even higher percentage of rare earth processing. During a trade dispute earlier this year, China used its control over the critical materials as leverage as it pushed back against U.S. demands.
The U.S. currently maintains a stockpile of critical minerals for the defense industry, Bloomberg reports, but this would be the first such reserve for civilian use. Multiple major corporations have agreed to participate, including General Motors, Boeing, GE Vernova and Alphabet. The stockpile will reportedly be funded by a $10 billion loan from the U.S. Export-Import Bank, along with a $1.67 billion investment of private capital, and will be managed by three commodities trading houses, which will arrange for purchases and allocations of materials.
The board of the Export-Import Bank approved the plan Monday. The $10 billion loan will be more than twice as large as any previous deal made by the federal agency.
Later this week, in another effort targeting China’s dominance in rare earths, the White House has planned a summit with dozens of countries to discuss new mineral supply deals.