Rare Earths: US Government Invests in Raw Material Reserves

Donald Trump has unveiled a government program that provides for the establishment of a domestic reserve of strategic raw materials. This includes critical materials and rare earth elements such as gallium and cobalt, which are important building blocks for the production of components for cars, computers, and smartphones. The financing volume for “Project Vault” is 12 billion US dollars. The reserve will enable US companies to access central stockpiles in emergencies, thus protecting them against shortages and price fluctuations.

“Just as we have long had a strategic oil reserve and a stockpile of critical minerals for national defense, we are now creating this reserve for American industry,” Trump said at the announcement in the Oval Office. 10 billion US dollars come from a loan from the US Export-Import Bank, the rest from private capital. More than a dozen companies are participating in the initiative, including Google, General Motors, Stellantis, and Boeing.

The system is based on a kind of subscription model: for a fee and the commitment to a later purchase, companies secure the right to deposit an individual list of required raw materials with “Project Vault.” The initiative then takes over the procurement and central storage of these materials. The companies can flexibly use their stockpiles during ongoing operations, as long as they ensure adequate replenishment. If an acute supply chain crisis occurs, the entire contingent is available as a safety reserve.

Resource Sovereignty: How the US Wants to Break the Resource Dictate

With this initiative, the US government is reacting to China's dominance in the raw materials market: the country controls 70 percent of primary extraction and holds a virtual global monopoly in chemical processing with a share of 90 percent.

Beijing used this market-dominant position as leverage in the trade dispute with Washington. After the US increased pressure through new tariffs and tech blockades, Beijing reacted with export controls, which led to critical shortages in US industry and in the EU. “We never want to go through what we experienced a year ago again,” Trump said.

To establish alternative supply chains, the US government has already concluded strategic agreements with Ukraine, Australia, Japan, and Malaysia. This international alliance is flanked by a planned agreement with the EU to make joint raw material supply more crisis-resistant through closer cooperation. At the same time, the Trump administration is investing heavily in domestic companies to strengthen the extraction and processing of critical materials directly on US soil.

(dahe)