US Launches $12bn Project Vault for Critical Minerals
According to reports published by the Financial Times, officials within the United States government and the US Export-Import Bank (EXIM) have confirmed the launch of a $12 billion initiative designed to secure the nation’s supply of critical minerals. The programme, titled Project Vault, represents a significant shift in American industrial policy, aiming to establish a robust strategic reserve of materials essential for high-technology manufacturing, renewable energy, and national defence. The Financial Times reports that the US Export-Import Bank will provide $10 billion in debt financing to support the effort, which is specifically intended to counter the long-standing dominance of the People’s Republic of China in the global mineral processing and supply sectors.
Background of Mineral Dependency
The establishment of Project Vault follows years of increasing concern regarding the concentration of critical mineral supply chains. For over two decades, China has maintained a dominant position in the extraction and, more importantly, the processing of rare earth elements and other essential minerals such as lithium, cobalt, and graphite. According to data from the US Geological Survey, China currently controls approximately 60 per cent of global rare earth production and nearly 90 per cent of the world’s processing capacity. This concentration has created a vulnerability for Western economies, particularly as the global transition toward electric vehicles and renewable energy infrastructure accelerates.
Previous attempts to diversify these supply chains have met with varying degrees of success. The US government has utilised the Defense Production Act to stimulate domestic mining, yet the lead times for new mining projects often exceed a decade. Furthermore, the volatility of mineral prices has historically discouraged private investment in domestic processing facilities. Officials indicate that Project Vault is designed to address these market failures by providing a financial and physical buffer against supply disruptions and price manipulation. The initiative aligns with the broader goals of the Inflation Reduction Act and the CHIPS and Science Act, both of which emphasise the necessity of secure, non-adversarial supply chains for critical technologies.
Key Developments and Project Vault Mechanics
The primary mechanism of Project Vault involves the creation of a massive strategic stockpile, managed through a combination of public oversight and private sector participation. The Financial Times reports that the $12 billion total valuation of the project includes a $10 billion debt financing package provided by the US Export-Import Bank. This financing is expected to be extended to a consortium of domestic companies and international partners who will be responsible for the procurement, storage, and maintenance of the mineral reserves.
Project Vault is structured to function similarly to the Strategic Petroleum Reserve, but with a focus on the materials required for the 21st-century economy. The minerals targeted for the stockpile include, but are not limited to, lithium, nickel, cobalt, manganese, and various rare earth elements such as neodymium and dysprosium. These materials are vital for the production of permanent magnets used in electric vehicle motors and wind turbines, as well as for the high-capacity batteries required for grid storage.
The involvement of the US Export-Import Bank is a critical component of the strategy. Under its “China and Transformational Exports Program” (CTEP), the bank is mandated to provide financing that helps US exporters compete with Chinese state-backed entities. By providing $10 billion in debt financing, EXIM enables the project to secure large-scale purchase agreements with mining operations in “friendly” jurisdictions, such as Australia, Canada, and various nations across Africa and South America. This approach is intended to provide a guaranteed market for non-Chinese mineral producers, thereby encouraging investment in new extraction and refining capacity outside of China’s sphere of influence.
Impacts on Global Markets and Industry
The announcement of a $12 billion stockpile is expected to have immediate and long-term effects on global mineral markets. In the short term, the procurement phase of Project Vault may lead to increased price stability for certain commodities, as the US government becomes a significant and predictable buyer. Market analysts suggest that the existence of a strategic reserve could deter speculative trading and reduce the impact of sudden export restrictions, such as those previously imposed by China on gallium and germanium.
For the mining industry, Project Vault provides a level of financial certainty that has been lacking. Mining companies operating in the Western hemisphere have often struggled to compete with Chinese firms that benefit from lower environmental standards and significant state subsidies. With the backing of $10 billion in EXIM debt financing, these companies can more easily secure the capital necessary for expansion. Furthermore, the project encourages the development of domestic processing and refining facilities, which are currently the weakest link in the US supply chain. By ensuring that there is a “vault” to receive processed materials, the US government is effectively subsidising the creation of a parallel supply chain that bypasses Chinese infrastructure.
However, the scale of the project also raises questions regarding market distortion. Some international partners have expressed concern that a massive US-led stockpile could lead to a “bidding war” for available mineral supplies, potentially raising costs for smaller nations or private companies not affiliated with the project. The US government has stated that it intends to work through the Mineral Security Partnership (MSP) to ensure that Project Vault complements the efforts of allied nations rather than undermining them.
Reactions from Stakeholders and International Observers
The reaction to the Financial Times report has been divided along predictable geopolitical and industrial lines. Within the United States, the initiative has received broad bipartisan support in principle, as both major political parties have identified Chinese control over critical minerals as a primary national security risk. Lawmakers have noted that the $10 billion in EXIM financing is a necessary use of the bank’s expanded authorities to counter Chinese economic influence.
Industry groups representing the automotive and renewable energy sectors have welcomed the news, citing the need for long-term supply security. A spokesperson for a major trade association indicated that the establishment of Project Vault would provide the “predictability required for multi-billion dollar investments in domestic battery manufacturing.” Without a secure supply of raw materials, these manufacturers remain vulnerable to geopolitical tensions that could halt production lines.
International reactions have been more nuanced. While allies such as Australia and Canada see the project as an opportunity to expand their mining sectors, there are concerns regarding the implementation of “Buy American” provisions that might accompany the financing. In China, state-affiliated media outlets have characterised the move as an attempt to “weaponise” supply chains and have warned that such actions could lead to further fragmentation of global trade. Chinese officials have historically maintained that their dominance in the mineral sector is a result of market forces and long-term investment rather than anti-competitive practices.
Next Steps and Implementation Timeline
The implementation of Project Vault is expected to proceed in several phases over the coming years. According to the details reported, the initial phase will focus on the finalisation of the debt financing agreements between the US Export-Import Bank and the selected project managers. This process involves rigorous due diligence to ensure that the procurement of minerals adheres to environmental, social, and governance (ESG) standards, a key requirement for US-backed financing.
Following the financial arrangements, the project will move into the procurement phase. This will involve the signing of long-term off-take agreements with mining operations. Officials have indicated that the first minerals to be stockpiled will likely be those with the highest risk of supply disruption, such as heavy rare earths and battery-grade cobalt. The physical infrastructure for the stockpile, including high-security warehouses and specialised storage facilities for reactive materials, will also need to be commissioned or expanded.
Legislative oversight will remain a constant factor as the project develops. The US Congress is expected to receive regular briefings on the status of the stockpile and the effectiveness of the EXIM financing. There are also plans to integrate Project Vault with the National Defense Stockpile, which is managed by the Defense Logistics Agency, to ensure that military requirements are prioritised. As of February 2026, the project is moving from the planning stages into active execution, with the first major mineral purchases expected to be announced by the end of the fiscal year. The success of the initiative will ultimately be measured by its ability to reduce US reliance on Chinese processing and to foster a more resilient, diversified global market for critical minerals.