WASHINGTON: The United States is expected to launch a critical minerals stockpile with $12 billion in initial funding, a White House official confirmed Monday, as Washington seeks to lower reliance on China for rare earths and other resources.
The project, which was first reported on by Bloomberg, is anticipated to bring together some $1.7 billion in private capital and a $10 billion loan from the Export-Import Bank of the United States (EXIM).
This would go towards securing and storing the key minerals for businesses like automakers and tech companies – forming a stockpile for the US private sector – the White House official confirmed on condition of anonymity.
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Rare-earth metals, which are crucial in the production of everything from smartphones to fighter jets and electric cars, have become a strategic bargaining chip since major producer China introduced restrictions on exports last year.
China’s dominance in the rare earths industry, from natural reserves and mining through processing and innovation, is the result of a decades-long drive.
This has now provided Beijing with important leverage in trade talks with President Donald Trump’s administration.
The stockpile that Trump is set to announce is aimed at blunting this effect over time.
It is expected to cover both rare earths and critical minerals, alongside other important elements that might see price volatility, Bloomberg reported.
The report added that more than a dozen companies including automakers General Motors and Stellantis, aviation behemoth Boeing and tech giant Alphabet’s Google, are taking part in the initiative dubbed “Project Vault.”
China’s export restrictions have raised alarm bells in the United States as the world’s two biggest economies again crossed swords with escalating tariffs after Trump returned to the presidency last year.
Washington and its allies are now racing to develop alternative mining and processing supply chains.
But experts warn that this process will likely take years to complete.
The EXIM Bank is expected to vote Monday to authorize the 15-year loan, Bloomberg reported, noting that this would be a record-setting deal.
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