Washington — The Trump administration is expected to unveil its largest rebuilding plan yet Supply chains for critical minerals needed for everything from jet engines to smartphones, likely through offtake agreements with partners as well as the creation of $12 billion US Strategic Reserve To help Confronting Chinese hegemony.
Vice President J.D. Vance is scheduled to deliver a keynote speech on Wednesday at a meeting hosted by Secretary of State Marco Rubio with officials from dozens of European, Asian and African countries. The United States is expected to sign deals on supply chain logistics, although details have not yet been revealed. On Tuesday, Rubio met with the foreign ministers of South Korea and India to discuss the extraction and processing of important minerals.
The meeting and the expected agreements come after only two days President Donald Trump The company announced a “Vault Project,” or a reserve of critical minerals, that will be financed with a $10 billion loan from the U.S. Export-Import Bank and approximately $1.67 billion in private capital.
The Trump administration is making such bold moves after China, which controls 70% of the world’s rare earth mining and 90% of processing, throttled the flow of the items in retaliation. Trump’s tariff war. The two superpowers entered into a one-year truce after Trump and Chinese President Xi Jinping Met in October And he agreed Roll back high tariffs Restrictions on rare earth elements have intensified.
But China’s borders remain tighter than they were before Trump took office.
“We never want to go through what we went through a year ago,” Trump said Monday when announcing Project Vault.
said Benny Althouse, who founded Oklahoma rare earth miner USA rare earth In 2019.
“They are looking to create a kind of buyers’ club, if you will,” said Althaus, who is now developing new mines in Kazakhstan and Uzbekistan as CEO of Cove Capital. “Major producers and major consumers of critical minerals will come together and work on pricing structures, floor pricing and other things.”
Last week the government also made its fourth direct investment in a significant US mineral producer when it provided $1.6 billion to USA Rare Earth in exchange for a stock and payment agreement.
Seeking government funding these days is like meeting with private equity investors because officials vet companies to make sure anyone they invest in can succeed, Althouse said. He added that the government is demanding conditions aimed at achieving a return for taxpayers while repaying loans and rising stock prices.
Meanwhile, the board of the US Export-Import Bank this week approved a $10 billion loan — the largest in its history — to help finance the creation of the US Strategic Minerals Reserve. It is tasked with ensuring access to critical minerals and related products for manufacturers, including battery maker Clarios, energy equipment maker GE Vernova, digital storage company Western Digital and aerospace giant Boeing, according to the policy bank.
The project creates a public-private partnership formula that is “uniquely suited and puts America’s best foot forward,” the bank’s president and CEO, John Yovanovitch, told CNBC.
“What it does is it creates a scenario where there are no free riders,” he said. “Everyone is stepping in to solve this huge problem.”
Manufacturers, who benefit most from the reserve, make a long-term financial commitment, while the government loan stimulates private investment, Jovanovic said.
Wade Sinti, president of US permanent magnet company AML, said the inventory strategy could help launch a “more organic” pricing model that excludes China, which has used its dominance to flood the market with lower-priced products to squeeze rivals.
The Trump administration has also pumped public funds directly into this sector. The Pentagon has Bombed Nearly $5 billion over the past year to help ensure its access to materials after the trade war revealed how much the US owes China.
A bipartisan group of lawmakers last month proposed creating a new $2.5 billion agency to stimulate production of rare earth elements and others. Critical minerals. Lawmakers praised the steps taken by the Trump administration.
“It is a clear sign that there is bipartisan support for securing robust domestic supplies of critical minerals that reduce our dependence on China and stabilize the market,” Sens. Jeanne Shaheen, D-N.H., and Todd Young, R-Ind., said in a joint statement Tuesday.
Building a stockpile will help U.S. companies weather rare earth supply disruptions in the future, but it will likely be a long-term effort because the materials are still scarce right now under China’s restrictions, said David Abraham, a rare earths expert who has followed the industry for decades and author of “Elements of Strength.”
The Trump administration has focused on revitalizing production of critical minerals, but Abraham said it is also important to encourage the development of manufacturing that will use them. He pointed out that Trump’s decisions Reducing incentives for electric cars Wind turbines have undermined demand for these items in America.