The Trump administration plans to deploy nearly $12 billion to create a strategic reserve of rare earth elements, a stockpile that could counter China's ability to use its dominance of these hard-to-process metals as leverage in trade talks. The White House confirmed on Monday the start of "Project Vault," which would initially be funded by a $10 billion loan from the US Export-Import Bank and nearly $1.67 billion in private capital, reports the AP. The minerals kept in the reserve would help to shield the manufacturers of autos, electronics, and other goods from any supply chain disruptions.
During trade talks last year spurred by President Trump's tariffs, the Chinese government restricted the exporting of rare earths that are needed for jet engines, radar systems, electric vehicles, laptops, and phones. China controls about 70% of the world's rare earths mining and 90% of global rare earths processing. That gave it a chokehold on the sector that has caused the US to nurture alternative sources of the elements, creating a stockpile similar to the national reserve for petroleum.
The loan would be for a period of 15 years. The US government has previously taken stakes in the rare earths miner MP Materials, as well as providing financial backing to the companies Vulcan Elements and USA Rare Earth. Bloomberg News was the first to report the creation of the rare earths strategic reserve. Trump is scheduled on Monday to meet with General Motors CEO Mary Barra and mining industry billionaire Robert Friedland.
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