US Initiates Project Vault: Strategic Rare Earth Reserve to Offset China's Dominance

The US plans to deploy USD 12 billion to create a strategic reserve of rare earth elements through Project Vault. Funded by the US Export-Import Bank and private capital, the reserve aims to combat China's dominance in rare earth processing, safeguarding manufacturers from supply chain disruptions.

In a bid to reduce reliance on China's stronghold in the rare earth elements sector, the Trump administration announced 'Project Vault,' a strategic move expected to create a reserve supported by nearly USD 12 billion. This initiative highlights growing geopolitical tensions over the control of essential resources for modern technologies.

Funded by a USD 10 billion loan from the US Export-Import Bank and supplemented by around USD 1.67 billion from private investors, Project Vault is set to stabilize and secure the supply chain for manufacturers heavily reliant on these critical materials. These include industries producing autos, electronics, and defense equipment.

The US government's proactive stance comes after China's decision to restrict rare earths exports during previous trade tensions, emphasizing the importance of diversifying supply sources. Currently, China accounts for 70% of global mining and 90% of the processing of these elements, making this US initiative crucial for economic and strategic security.