The United States has launched a strategic reserve battle for key minerals, with Trump throwing $12 billion to kick-start the "Vault Program".

President Trump plans to initiate a strategic critical minerals reserve and provide $12 billion in seed funding to protect manufacturers from supply shocks while reducing reliance on China Rare Earth Resources And Technology and other metals. The joint venture project, named "Project Vault", aims to combine $167 million in private capital with a $10 billion loan from the Export-Import Bank of the United States to purchase and store minerals for automakers, tech companies, and other manufacturers. Senior government officials describing the plan detail that this will be the first of its kind reserve in the U.S. private sector. This effort is similar to the existing emergency oil reserve in the U.S., but the focus is no longer on crude oil, rather minerals used in products like iPhones, batteries, and jet engines, such as gallium and cobalt. The reserve is expected to include rare earths, critical minerals, and other strategically important elements affected by price fluctuations. This represents a significant commitment by the U.S. to accumulate critical minerals needed for industrial economy (including automotive, aerospace, and energy sectors) and highlights Trump's efforts to reduce American reliance on China. China is the leading global supplier and processor of critical minerals. As of now, over a dozen companies have joined the project, including General Motors, Straniti, Boeing, Corning, GE Vernova Inc., and Google under Alphabet. Hartree Partners LP, Traxys North America LLC, and Mercuria Energy Group Ltd., three commodity trading firms, have signed contracts to procure the raw materials needed to fill the reserve. The Export-Import Bank's board is scheduled to vote Monday evening to authorize this record-breaking 15-year loan, which is more than twice the amount of the second largest transaction in the bank's history. Trump is set to meet with General Motors CEO Mary Barra and mining billionaire Robert Friedland on Monday, representing producers and users of critical minerals. The U.S. currently operates a national reserve for critical minerals serving the national defense industrial base, but does not have a reserve for civilian needs. Under Trump's leadership, the U.S. has also taken the rare step of directly investing in domestic mining companies to increase domestic production and processing capabilities of rare earths. The government has signed cooperation agreements on this issue with countries like Australia, Japan, and Malaysia. During the multilateral summit in Washington scheduled for Wednesday, the government will pressure more countries to reach such agreements. Efforts to reduce mineral supply chain risks gained new momentum last year after China tightened its export controls on certain materials. This new joint venture project will provide a way for participating manufacturers to shield their businesses from the impact of price fluctuations of critical materials without having to maintain reserves themselves. Such price fluctuations could leave companies exposed to significant swings in the cost of key raw materials, damaging their balance sheets. For example, shortly after the Russia-Ukraine conflict, nickel prices soared due to concerns buyers would no longer be able to purchase metals from top supplier Russia. Some details of the structure of the "Project Vault" are not immediately disclosed, including the institutional investors contributing the $167 million. Senior government officials state that the project is oversubscribed due to the creditworthy group of manufacturers, their long-term commitments, and the involvement of the U.S. official export credit agency. Specific holding costs charged to these manufacturers, as well as fees paid to trading companies participating as procurement officers, have not been disclosed. Under this arrangement, companies initially committed to purchasing materials at a set inventory price in the future and paying some upfront costs will be able to submit a preferred materials list to the "Project Vault." In turn, the project will seek to procure and store these materials, with manufacturers bearing expenses related to loan interest and holding elements (i.e., holding costs). Manufacturers will be allowed to withdraw materials from their reserves as long as they replenish them. Officials state that in the event of a major supply disruption, they will be able to withdraw the entire reserve. A key element of the plan is that manufacturers commit to repurchasing the same quantity of materials at the same cost in the future as they purchased at a set price. The government believes this will act as a stabilizing mechanism to help curb fluctuations.