US Launches $12bn Project Vault to Secure Mineral Supplies
Introduction to Project Vault
On 2 February 2026, the United States government announced the commencement of a $12 billion strategic initiative, titled Project Vault, designed to establish a comprehensive national stockpile of critical minerals. According to a report by the Financial Times, the US Export-Import Bank (EXIM) is set to provide $10 billion in debt financing to support the procurement and storage of materials essential for high-technology manufacturing and national defence. The primary objective of the programme is to mitigate the risks associated with China’s current dominance in the global mineral supply chain.
The initiative represents a significant escalation in the US strategy to secure its industrial base against supply disruptions. By creating a physical reserve of minerals such as lithium, cobalt, nickel, and rare earth elements, the US aims to provide a buffer for domestic manufacturers. The Financial Times reports that the financing will be directed towards both the acquisition of raw materials and the development of the infrastructure required to maintain the stockpile over the long term.
Background of Mineral Dependency
The establishment of Project Vault follows years of increasing concern regarding the concentration of mineral processing and mining in the People’s Republic of China. As of the mid-2020s, China controlled approximately 60 per cent of global lithium processing, 80 per cent of cobalt refining, and nearly 90 per cent of rare earth element production. This concentration has historically allowed for significant market influence, including the implementation of export controls on materials like gallium and germanium in previous years.
The US government has identified over 50 minerals as “critical” to the economic and national security of the country. These materials are fundamental to the production of electric vehicle (EV) batteries, semi-conductors, wind turbines, and advanced military hardware. Previous efforts to address this dependency, such as the Inflation Reduction Act and the Mineral Security Partnership, focused largely on incentivising domestic production and strengthening ties with allied nations. Project Vault marks a shift towards direct state-backed market intervention through large-scale stockpiling.
The Role of the US Export-Import Bank
The US Export-Import Bank’s involvement is central to the financial viability of Project Vault. By providing $10 billion in debt financing, EXIM is utilizing its “China and Transformational Exports Program” (CTEP), which was established by Congress to support US exporters facing competition from China. The Financial Times notes that this financing will allow the government to engage in long-term procurement contracts, providing price certainty to miners and processors who operate outside of Chinese influence.
EXIM’s mandate allows it to support projects that have a direct impact on US employment and industrial competitiveness. In the context of Project Vault, the bank’s role extends beyond simple lending, it acts as a guarantor for the massive capital outlays required to purchase minerals at scale. This level of state-backed financing is intended to signal to private markets that the US is committed to maintaining a stable supply of materials, regardless of geopolitical fluctuations or market volatility.
Strategic Composition of the Stockpile
While the full list of minerals included in Project Vault remains classified for national security reasons, industry analysts and the Financial Times suggest the focus is on materials with the highest supply chain risk. Lithium and cobalt, which are essential for the lithium-ion batteries used in both consumer electronics and electric vehicles, are expected to comprise a significant portion of the initial procurement phase.
Additionally, rare earth elements, including neodymium and dysprosium, are critical for the permanent magnets used in jet engines and renewable energy infrastructure. The US has historically relied on Chinese imports for these processed magnets. Project Vault is expected to include processed or semi-processed forms of these minerals, rather than just raw ores, to ensure that the materials can be integrated into manufacturing pipelines with minimal delay. The storage facilities for these materials are reportedly being prepared in multiple locations across the continental United States to ensure logistical resilience.
Geopolitical and Market Impacts
The announcement of a $12 billion stockpile is expected to have immediate effects on global mineral markets. By entering the market as a major buyer, the US government may influence global price discovery for critical minerals. Financial experts suggest that the move could lead to increased price stability by absorbing excess supply during periods of low demand and providing a reserve during shortages. However, the scale of the $10 billion debt financing also introduces a significant new source of demand that could, in the short term, put upward pressure on prices for specific commodities.
From a geopolitical perspective, Project Vault is a direct response to China’s “Made in China 2025” and other industrial policies that have prioritised the control of the “green” supply chain. By reducing the leverage that China holds over the US industrial sector, Washington aims to increase its strategic autonomy. The Financial Times indicates that the US has consulted with members of the Mineral Security Partnership, including Australia, Canada, and the European Union, to ensure that Project Vault complements international efforts to diversify supply chains rather than competing with them for limited resources.
Industry and International Reactions
Initial reactions from the mining and automotive sectors suggest a cautious welcome for the initiative. Domestic mining companies in the US and allied nations, such as those operating in Western Australia and the Canadian Shield, view the $10 billion in EXIM financing as a potential source of long-term off-take agreements. These agreements are often necessary for mining projects to secure the private investment required for construction and operation.
International observers have noted that the move may prompt similar stockpiling initiatives in other jurisdictions. The European Union, through its Critical Raw Materials Act, has already established targets for domestic extraction and recycling, but it has not yet committed to a central stockpile of the magnitude seen in Project Vault. In China, state-affiliated media and industry bodies have historically criticised US “de-risking” efforts as protectionist, though official government responses to the Project Vault announcement are still being monitored.
Implementation and Next Steps
The implementation of Project Vault is scheduled to occur in phases over the next several fiscal years. The first phase involves the finalisation of the debt financing agreements between EXIM and the various procurement agencies. Following this, the US government will begin issuing tenders for the supply of specific minerals. According to the Financial Times, the procurement process will prioritise minerals sourced from the US or from countries with which the US has a free trade agreement or a formal mineral security pact.
The construction and upgrading of specialised storage facilities are also a priority. Unlike traditional commodities, many critical minerals require specific environmental conditions to prevent degradation or to ensure safety. For instance, certain processed rare earth metals must be stored in inert environments to prevent oxidation. The Department of Energy is expected to provide technical oversight for the storage and maintenance of the stockpile.
Long-term Outlook for US Mineral Security
Project Vault represents a fundamental change in how the US manages its industrial inputs. By moving away from a “just-in-time” supply chain model towards a “just-in-case” strategic reserve, the government is acknowledging that market forces alone may not be sufficient to guarantee the availability of critical materials during periods of geopolitical tension. The $12 billion investment is one of the largest single commitments to mineral security in US history.
As the programme matures, the focus may shift from initial procurement to the recycling and recovery of minerals from end-of-life products. However, for the immediate future, the priority remains the accumulation of a physical buffer. The success of Project Vault will be measured by its ability to insulate US manufacturers from supply shocks and to reduce the strategic advantage currently held by dominant market players in the mineral sector. The Financial Times report concludes that the initiative is a cornerstone of a broader US industrial policy aimed at securing the technologies of the future.
Sources:
- Financial Times, “US to launch $12bn critical minerals stockpile to counter China’s dominance,” 2 February 2026.
- US Export-Import Bank, “China and Transformational Exports Program (CTEP) Guidelines.”
- US Department of Energy, “Critical Minerals Strategy and National Security Reserves.”