US plans $12 billion stockpile to cut China dependence; rare earth security becomes strategic priority

The United States is preparing to launch a $12 billion critical minerals stockpile initiative aimed at reducing dependence on China for rare earths and other strategic resources, according to a White House official, as Washington intensifies efforts to secure supply chains for key industries, AFP reported.The project is expected to combine about $1.7 billion in private capital with a $10 billion loan from the Export-Import Bank of the United States (EXIM), with funding directed towards securing and storing critical minerals for use by US industries including automotive, technology and defence sectors.The stockpile is designed to support private-sector demand by ensuring access to minerals vital for manufacturing products ranging from smartphones and electric vehicles to advanced military equipment.Rare-earth metals have gained strategic importance after China, a dominant global supplier, imposed export restrictions last year, heightening supply chain concerns across Western economies.China’s dominance across the rare earth value chain — spanning mining, processing and advanced materials innovation — is the result of sustained industrial policy over several decades, giving Beijing leverage in global trade negotiations.The proposed stockpile, expected to be announced by President Donald Trump, aims to gradually offset this advantage and stabilise access to critical materials for US manufacturers.According to reports, the initiative — dubbed “Project Vault” — could involve participation from more than a dozen companies, including automakers General Motors and Stellantis, aerospace major Boeing and technology firm Alphabet-owned Google.The programme is expected to cover rare earths, critical minerals and other strategic elements prone to supply disruptions and price volatility.The move comes amid renewed trade tensions between the United States and China following the reintroduction of tariffs after Trump returned to the presidency last year.The US and its allies are increasingly investing in alternative mining and processing supply chains to reduce strategic dependence on China, though industry experts caution that building fully diversified supply networks could take several years.The EXIM Bank is expected to vote on authorising the proposed 15-year loan for the project, which could become one of the largest financing deals of its kind, according to reports.