Project Vault
In February, the Trump administration launched Project Vault, a public-private partnership to establish a strategic domestic reserve of critical minerals in the U.S., backed by $10 billion from the Export-Import Bank of the United States (EXIM) and $2 billion from private funds. It aims to store 60 critical minerals to enhance the resilience of U.S. industries against supply chain disruptions.
Purpose and Background
- Project Vault is designed to reduce reliance on foreign-controlled supply chains and mitigate geopolitical risks.
- The concept is akin to the Strategic Petroleum Reserve established in 1975.
- China's dominance in minerals like rare earth magnets highlighted vulnerabilities in global supply chains, leading to the project's inception.
Functionality and Benefits
- Functions as a long-term insurance for domestic manufacturers by allowing procurement without geographic restrictions.
- Includes predefined conditions for withdrawal and replenishment of reserves.
- Participants pay a security premium for storage, ensuring supply certainty and protection against volatile prices.
Global and Strategic Implications
Project Vault is part of a broader strategy to treat critical minerals as strategic assets crucial to national power. EXIM Chairman John Jovanovic emphasized its initial focus on domestic manufacturing and allied partnerships to strengthen global supply chains.
International Collaborations
- The U.S. has signed bilateral agreements with countries like Japan, the EU, Mexico, and the UK for border-adjusted price mechanisms.
- Multilateral initiatives include the Forum on Resource Geostrategic Engagement (FORGE), aimed at coordinating critical minerals policy and pricing.
Pax Silica Initiative
Launched in December 2025, the Pax Silica initiative aims to build secure supply chains crucial to AI, involving countries like Australia, Japan, and the UK. India has been invited as a full member.
Challenges and Concerns
- Potential dominance by ‘America First’ politics, leading to asymmetrical negotiations with partner countries.
- Ensuring predictability, trust, and less volatility remain key challenges for U.S.-led initiatives.
The content was summarized by Harisundar Kumar, a NASP Fellow at the Takshashila Institution.
