A US government plan to build one of the largest strategic mineral reserves in history risks distorting global commodity markets, said Bloomberg News in an analysis of President Donald Trump’s $12bn fund, ‘Project Vault’.
The newswire cited analysts questioning whether the funds deployed were sufficient to cover the 60 minerals targeted by the plan — even as they broadly welcomed the initiative’s intent.
Project Vault, signed off by Trump at a White House ceremony in February, marks a significant departure from conventional emergency stockpiling, said Bloomberg News. Where the Strategic Petroleum Reserve — created in the 1970s after an oil embargo to protect the US from supply shocks — is a federally managed buffer, Project Vault deliberately embeds private industry into its day-to-day operation, extending its role well beyond crisis response into the functioning of the civilian economy, it said.
Industrial users including General Motors, Boeing and Google have pledged to purchase materials, while traders and logistics firms will handle sourcing, transport and storage. Some $10bn in public capital is being provided by the Export-Import Bank, with the remainder from banks, investment funds and corporate buyers.
In effect, it functions less as an emergency reserve than as a state-sponsored market — one that uses public financing to underwrite private supply chains, said Bloomberg News.
John Jovanovic, the Ex-Im Bank’s chairman, described the approach as “a very novel, innovative” solution to protecting American manufacturers in an era of fracturing economic alliances. He expects the reserve to begin accumulating minerals this year.
“I actually think it’s super overdue,” said Gracelin Baskaran, director of the critical minerals programme at the Centre for Strategic and International Studies. “We’re developing an economic security stockpile, which is completely parallel to our national defence stockpile.”
Others cautioned against moving too quickly. “Purchasing material progressively over time, rather than acquiring a large volume during a period of tightness, would be less likely to create additional disruption,” Thomas Matthews, an analyst at CRU Group told the newswire.
The programme’s scope presents significant financial challenges. Securing just a 60-day buffer of copper and aluminium alone would consume nearly $9.5bn of the reserve’s budget, according to Wood Mackenzie, leaving little room for broader coverage.
Helen Amos, a commodities analyst at BMO Capital Markets, placed the effort in a wider geopolitical context. “We’re in this period of hoarding and stockpiling,” she said. “This is very much tied to global fragmentation.”
China’s dominance in rare earth processing — and its willingness to deploy export restrictions as a negotiating lever — has lent the project considerable urgency, though analysts note the US remains heavily dependent on Chinese refining capacity regardless of where raw materials are sourced.
Jovanovic acknowledged Project Vault alone would not be enough to build a robust domestic minerals supply, telling Bloomberg it was nonetheless “a good start” that “solves a critical piece of the puzzle.”
