Trump’s $12B minerals vault to cut China reliance

U.S. President Donald Trump launched a strategic stockpile of critical minerals on Monday backed by $12 billion to protect manufacturers from supply disruptions as the country accelerates efforts to reduce dependence on Chinese metals.

Project Vault is to tap $1.67 billion in private capital and a $10-billion loan from the U.S. Export-Import Bank to buy and store minerals for automakers, technology companies and other industrial users. Trump met with General Motors CEO Mary Barra, mining entrepreneur Robert Friedland, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick among other officials in an Oval Office ceremony to kick off the concept. 

The model mirrors the country’s emergency oil reserve but focuses instead on materials such as gallium and cobalt used in products ranging from smartphones to jet engines. The project spans the automotive, aerospace and energy sectors and underscores Trump’s broader push to rewire U.S. supply chains away from China, the world’s dominant producer and processor of critical minerals.

“For years, American businesses have risked running out of critical minerals during market disruptions,” Trump said, reading from the order to create the cache. “Just as we have long had a strategic petroleum reserve and a stockpile of critical minerals for national defence, we’re now creating this reserve for American industry so we don’t have any problems.”

Companies support 

More than a dozen companies have signed on, including General Motors, Stellantis, Boeing, Corning, GE Vernova. and Alphabet’s Google. Commodities traders Hartree Partners, Traxys North America and Mercuria Energy Group will handle purchases to fill the stockpile.

Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) founder and co-executive chairman Robert Friedland relayed the mining industry’s thanks to President Trump at the Oval Office ceremony.  

“We need your support, and we’re really happy to get it,” Friedland said. “The morale of the miners is sky high.”

The billionaire mining entrepreneur later said he was in talks for the Democratic Republic of Congo’s state miner Gecamines and Swiss commodities trader Mercuria to route zinc-rich concentrate from the Kipushi mine to the stockpile. Ivanhoe  partners with China’s Zijin Mining to run the Kamoa-Kakula copper complex in the DRC. 

“Project Vault is a clear signal that U.S. critical‑mineral policy has moved to deployment,” US Critical Materials chairman, Harvey Kaye, told the Northern Miner Group. “It says unequivocally that secure supplies of rare earths and heavy minerals like gallium are now treated as strategic infrastructure for our economy and defence industrial base, to establish U.S. sovereignty.”

Kaye noted that for companies like US Critical Materials, it confirms that high-grade domestic supply is no longer optional.

“The project is exactly the kind of serious, industrial-strength action America needs right now,” Adam Muellerweiss, President of the Responsible Battery Coalition, whose members include Johnson Controls, Honda, Ford, FedEx and Walmart, said in an emailed statement. “Even two years ago, this idea would have been unthinkable. The Trump Administration has made this a national security priority.”

‘Right direction’

While the announcement is a step in the right direction, it’s not a quick solution to China’s control of critical materials, analyst Dmitry Silversteyn at St. Petersburg, Fla.-based Water Tower Research said in a note.

“[I see] continuing to encourage development of domestic and friendly nations’ critical elements resources and metal processing capabilities and infrastructure as the ultimate and required goal to end, or at least significantly reduce, dependence on China’s goodwill,” Silversteyn said.

Rebecca Seidl of Houston-based law firm Baker Botts said that for mining and minerals companies, the move is not simply a one-time stockpile but rather a broader shift in federal posture. 

“The federal government is preparing to behave like a repeat buyer, market stabilizer, and strategic counterparty, particularly where China’s dominance in mining and processing creates price and availability risk,” Seidl wrote in a Feb. 3 note. “As such, projects able to demonstrate reliable production, domestic or allied processing, and credible clean supply-chains will have an easier path to financing and offtake.”

Pentagon pile

While the U.S. already maintains a national stockpile for defence purposes, it lacks a comparable reserve for civilian industry. That gap has taken on urgency as the Pentagon ramps up its own accelerated stockpiling campaign, targeting up to $1 billion in mineral acquisitions in the near term.

The drive is supported by Trump’s One Big Beautiful Bill Act, which allocates $7.5 billion for critical minerals, including $2 billion to expand the national stockpile by 2027, $5 billion for supply-chain investments and $500 million for a Pentagon credit program to encourage private projects.

The administration has also taken the unusual step of investing directly in domestic mining companies to boost U.S. rare earths production and processing.

Last month, a bipartisan group of U.S. lawmakers introduced a bill to create a $2.5 billion stockpile of critical minerals, a move aimed at stabilizing market prices and encouraging domestic mining and refining.

Strong interest 

Senior administration officials told Bloomberg the project was oversubscribed, citing investor confidence in the credit quality of participating manufacturers, their long-term purchase commitments and the backing of the U.S. export-credit agency.

Under the plan, companies can draw down their allotted materials as long as they replenish them, with full access permitted during major supply disruptions.

Manufacturers that commit to buying set quantities at fixed prices will also agree to repurchase the same amounts at the same cost in the future, a structure the administration says will help stabilize prices and dampen market volatility.