As President Donald Trump seeks to bolster the critical minerals supply chain, public-private partnerships have become a key focus to reduce reliance on Chinese exports.
This week, Mr Trump unveiled “Project Vault”, a new minerals stockpile similar to the nation's strategic oil reserves. The initiative includes $10 billion in seed money from the Export-Import Bank, its largest loan, far surpassing the $4.95 billion it lent to a Saudi petrochemical centre in 2012.
The initiative also includes up to $2 billion in private-sector funding and is designed to bypass China's grip on the critical minerals supply chain.
“Having a resilient supply chain is critical for our nation,” General Motors chief executive Mary Barra said during the project's unveiling at the White House on Monday.
Critical and rare-earth minerals are used for vehicles, robotics, wind turbines, a broad range of technology and the chips powering the artificial intelligence boom.
US reliance on China's rare earth minerals was exposed last year when Beijing placed export restrictions during the two countries' tariff row. China accounts for 70 per cent of the world's rare-earth mining and 90 per cent of processing.
Harvey Kaye, executive chairman of US Critical Minerals, said companies urged Washington to implement permit reforms and provide market support to prevent China “from flooding the market”.
“The government responded to both of those things in a positive way, so it enabled us to be able to move forward much more efficiently,” Mr Kaye said.
He said US Critical Materials, which runs the Sheep Creek rare-earth minerals venture in Montana, has also been in discussions with the government that could accelerate the production of gallium and others.
They are critical for military uses such as in F-47s, bombers, submarines and aircraft. He said he expects to start bulk extraction from Sheep Creek in the next four to six months.
“We are one of the few companies that have these in very high grade and easily available, and so we consider ourselves at the forefront of helping this country be able to start breaking the stranglehold that the Chinese have on us,” Mr Kaye said.
“We can process it, and we can start delivering it, and again, start to build a stockpile, starting with gallium, which is now a number one priority of our government.”
Project Vault is part of a broader strategy from the Trump administration to shore up the critical minerals supply chain. The US recently announced a $1.6 billion investment in USA Rare Earth with the option of a minority stake in the mining company, as well as equity stakes in Trilogy Metals and Lithium Americas.
Last year, the Defence Department entered into a public-private partnership with MP Materials to help build an end-to-end US rare earth magnet supply chain. In November, the two linked up with Saudi mining company Maaden to develop a rare-earth minerals refinery in Saudi Arabia, after a framework to secure critical supply chains between the two countries.
With the exception of Kuwait, representatives from every country in the Gulf attended a forum on critical minerals at the State Department. While not mentioning China by name, Secretary of State Marco Rubio said it is economically unviable for countries to explore for critical minerals if a foreign competitor comes in and guts the price.
“We understand that this is a global challenge that requires a global response,” Mr Rubio said.
Washington later announced the US signed a host of critical minerals frameworks or preliminary agreements, including with the UAE and Morocco. The Democratic Republic of the Congo will also ship 50,000 tonnes of copper to Saudi Arabia and the UAE through its joint venture with Mercuria. The US International Development Finance Corporation is in discussions to finance the joint venture.
The US government says it has provided more than $30 billion with the private sector in the past six months that includes letters of interest, investments, loans and other support.
“They're putting government balance sheets to work, and they're looking to have other countries do the same. Hosting this ministerial is part and parcel of signalling that the US recognises they can't solve this problem completely on their own,” said Rachel Ziemba, founder of geopolitical risk firm Ziemba Insights.
The State Department said these agreements and the launch of a new bloc, called the Forum on Resource Geostrategic Engagement, or Forge, build on the “Pax Silica” initiative. Forge is a trade bloc designed as a buffer against supply chains being used as geopolitical influence by any one country, while Pax Silica protects supply chains related to AI.
The UAE and Qatar signed on to the latter last month.
Still, as the US looks to its private and global partners on ensuring supplies, there are still questions over the implementation of these arrangements that may not be completed until Mr Trump leaves office.
“There's a lot of diversity of countries involved, there's a question mark about prioritisation, and a lot of details that are still missing,” said Ms Ziemba.
She also said countries could be caught between wanting to avoid China's export restrictions while also not wanting their goods to be subject to US tariffs.
“There's a really strong commitment, there's a lot of bandwidth in terms of the administration being put into these areas, but a lot of questions still ahead.”
