Buried in large, underground salt caverns along Texas and Louisiana’s coast, the world’s largest supply of emergency crude oil has been an invaluable resource for the U.S. For five decades, the Strategic Petroleum Reserve has helped the U.S. government conduct foreign policy and calm markets and prices at the pump in the event of supply disruption. Such is the SPR’s importance that the Trump administration is set to build another reserve of that ilk, this time to stockpile a resource some analysts and politicians have referred to as the new oil and gas: rare earths.
President Donald Trump is planning a critical minerals stockpile known as Project Vault, Bloomberg reported on Monday, citing senior administration officials. The plan will combine a $10 billion loan from the U.S. Import-Export Bank with $1.67 billion in private capital, according to the report. A White House spokesperson confirmed to Fortune that the plan existed.
A stockpile is only the latest step Trump has taken to keep critical minerals flowing for American industries, as the administration has made the secure supply of critical minerals a core component of its manufacturing and foreign policy strategy.
The U.S. is no stranger to hoarding valuable resources as a hedge against geopolitical turmoil. The idea to stockpile an emergency stash of crude oil was floated as early as 1944, but it took a historic oil embargo to jolt the U.S. into action. For five months between 1973 and 1974, a cadre of petroleum-producing states in the Middle East and North Africa (plus Venezuela) slowed production and halted exports to the U.S. and other nations as retaliation for support toward Israel during the Yom Kippur War. This caused skyrocketing prices and fuel shortages, leading to an economic worst-case scenario known as “stagflation,” in which inflation rises but growth stays stagnant.
The crisis was eventually resolved, but the trauma remained. In 1975, President Ford authorized the construction of a strategic reserve to draw from in times of need, and in 1977, the first oil was delivered to the chosen site in the southeastern U.S.
A strategic reserve for modern times
In the same way that a small club of petroleum-producing states triggered an oil supply crisis in the 1970s, analysts have worried that the supply chain around critical minerals is making the U.S. similarly vulnerable in the 2020s, given that China controls the vast majority of both production and processing capacity that underlies these materials.
Critical minerals refer to a wide range of raw materials including cobalt, lithium, and gallium, as well as so-called rare earth metals that generally appear in low concentrations and can be complex to mine. These minerals are essential to building advanced electronics and fundamental to modern industries such as carmaking, computing, and energy. The stockpile will store minerals for U.S. automakers and tech companies, according to Bloomberg’s report, which mentions several large U.S. firms that have signed on to participate, including Google, General Motors, and Boeing.
The U.S. has fallen behind China in the race to dominate global supply chains for critical minerals. While a relatively small amount of production happens within China’s borders, the country controls between 40% and 90% of global processing, depending on the material, according to a report last year by the Center for Strategic and International Studies, a think tank. This is the result of a decades-long foreign industrial policy that targeted large mining stakes in Africa, South America, and Southeast Asia.
Of the 50 minerals deemed critical by the U.S. Geological Survey, China is the top producer for 29. Meanwhile, the U.S. is fully reliant on imports for 12 of these minerals, and more than 50% import-reliant for a further 29, according to the CSIS report.
China has already flexed its supply-chain muscle to the detriment of U.S. interests. Beginning in 2023, China has imposed export restrictions on certain critical minerals important for semiconductor manufacturing and telecommunications infrastructure. It has since tweaked, adjusted, and in some cases suspended these controls, but the Trump administration has nonetheless noted America’s new resource vulnerability. As far back as his first term, in a 2020 executive order, Trump himself called the U.S.’s reliance on imports for critical minerals an “unusual and extraordinary threat.”
Since returning to office a year ago, Trump has made significant moves to directly involve the U.S. in the business of securing the supply of critical minerals in the U.S. Last week, the administration announced a $1.6 billion investment in Rare Earths USA, a major minerals supplier. Over the summer, the Defense Department struck a deal to purchase $400 million in preferred stock from MP Materials, a rare earths mining firm, becoming the company’s largest shareholder. Critical minerals have also been a consistent theme behind Trump’s interest in acquiring Greenland, which holds the world’s eighth-largest reserve of rare earths.
Last month, the White House issued an executive order that seemed to imitate China’s diplomacy-first approach to critical minerals dominance. The order called for greater international collaboration to secure supply chains and boost domestic processing in the U.S. And this week, a summit discussing a strategic critical minerals alliance will be held in Washington. U.S. officials will meet with diplomats from partners including the U.K., EU, and New Zealand.
The idea of a 1970s-style strategic stockpile is apparently in vogue worldwide. Another country attending the summit will be Australia, which last month announced its own measure to safeguard its minerals supply: an approximately $800 million strategic reserve to store materials essential to high-tech manufacturing.
