Trump unveils $12bn critical minerals reserve in apparent move to counter China’s dominance | Donald Trump
Donald Trump announced the creation of a critical mineral reserve worth approximately $12 billion that could counter China’s ability to use its dominance in hard-to-work metals as leverage in trade negotiations.
“Today, we are launching what is known as Project Vault to ensure that American businesses and workers will never suffer from any shortages,” Trump said at the White House on Monday. he said.
He compared this to the Strategic Petroleum Reserve (SPR), created in the 1970s when the Arab oil embargo led to a devastating gas shortage.
US Interior Secretary Doug Burgum said 11 more countries will be announced for the initiative towards the end of this week.
The project will initially be financed with a $10 billion loan from the U.S. Export-Import Bank and approximately $1.67 billion in private capital. Minerals held in reserve will help protect manufacturers of vehicles, electronics and other goods from any supply chain disruptions.
During trade talks spurred by Trump’s tariffs last year, China restricted exports of rare earths needed for jet engines, radar systems, electric vehicles, laptops and phones.
“We never want to go through what we went through a year ago,” Trump said in an apparent reference to the showdown with China, adding that it ultimately “worked.” The president said he expects the government to make a profit on the loan used to start the reserve.
China controls approximately 70% of the world’s rare earth mining and 90% of global rare earth processing. This put pressure on the industry, causing the United States to cultivate alternative sources of the elements and create a stockpile similar to the national oil reserve.
The strategic reserve is expected to be the prominent topic of the ministerial meeting on critical minerals that Secretary of State Marco Rubio will host at the State Department on Wednesday.
Vice President J.D. Vance plans to deliver a keynote address at the meeting, which officials from several dozen European, African and Asian countries plan to attend. The meeting is also expected to include the signing of numerous bilateral agreements on improving and coordinating supply chain logistics.
The meeting will “create momentum for cooperation” among participants to secure access to rare earths, the State Department said in a statement announcing the meeting.
The government-backed loan financing the reserve will be valid for a period of 15 years. The US government previously took a stake in rare earth miner MP Materials and provided financial support to companies Vulcan Elements and USA Rare Earth.
Trump announced the reserve in the Oval Office alongside General Motors CEO Mary Barra and mining industry billionaire Robert Friedland, along with other members of his administration and congressional leaders.
With Associated Press and Reuters
