U.S. Launches $12 Billion 'Project Vault' to Counter China's Rare Earth Dominance
WASHINGTON — In a decisive move to secure its industrial and defense supply chains, the Trump administration is mobilizing close to $12 billion to establish a national strategic reserve for rare earth elements. The initiative, dubbed "Project Vault," is designed to blunt China's potential to wield its near-monopoly over these crucial materials as geopolitical leverage.
The White House confirmed the program's launch on Monday, outlining an initial funding structure involving a $10 billion loan from the U.S. Export-Import Bank and approximately $1.67 billion in private capital. Officials stated the reserve would act as a buffer for U.S. manufacturers of automobiles, consumer electronics, and advanced weaponry against future supply shocks.
The push for a domestic stockpile follows a stark reminder of supply chain vulnerability during last year's trade tensions. Beijing briefly restricted exports of rare earths—a group of 17 minerals essential for producing everything from F-35 jet engines and missile guidance systems to electric vehicle motors and smartphones.
China currently controls an estimated 70% of global rare earth mining and a staggering 90% of the complex processing capacity. This dominance has long unsettled Pentagon planners and industry leaders, prompting comparisons to the strategic petroleum reserve created after the 1970s oil crises.
"Project Vault is about economic sovereignty and national security," a senior administration official noted. The 15-year loan will bolster earlier government efforts, which include taking a stake in MP Materials, the owner of the only active rare earth mine in the U.S., and providing backing to processors like USA Rare Earth and Vulcan Elements.
The meeting scheduled for Monday between President Trump, GM CEO Mary Barra, and mining financier Robert Friedland underscores the cross-sector urgency driving the policy.
Bloomberg News first reported on the plan for the strategic reserve.
Voices from the Industry
David Chen, Supply Chain Analyst at TechInsight: "This is a necessary, albeit overdue, step. Diversifying supply isn't just a trade issue; it's a fundamental requirement for the next generation of U.S. manufacturing and tech innovation. The scale of investment finally matches the scale of the problem."
Senator Lisa Garrity (R-AZ): "For decades, we outsourced our critical mineral needs and hollowed out our industrial base. Project Vault is a cornerstone in rebuilding American resilience. We cannot allow any foreign power to hold the keys to our military and economic future."
Maya Rodriguez, Environmental Policy Advocate: "Throwing billions at stockpiling minerals misses the point entirely. This is a reactive, fear-driven policy that does nothing to address the horrific environmental cost of rare earth mining and processing. We need massive investment in recycling and truly sustainable alternatives, not just digging more holes or hoarding."
Franklin Moss, Retired Pentagon Procurement Officer: "The strategic logic is sound. In any potential conflict or severe tension, the first move isn't always a missile; it could be turning off the tap for the materials needed to build the missile. This reserve is a credible deterrent against that form of coercion."