The Trump administration announced this week that the US government will work to build an $11.7 billion stockpile of critical minerals. That’s the title; the subtext is more fun.
The stockpile initiative, called Project Vault, is the administration’s latest effort to secure supplies of critical minerals for US manufacturers and what President Donald Trump says will ensure “American businesses and workers will not be harmed by any shortages.”
This follows recent investments from the administration into rare earth producers, including equity stakes in miners USA Rare Earth and MP materials.
Individually, they could be interpreted as the administration taking steps to calm parts of the market that have been disrupted by its own trade war. Collectively, they are a recognition, however conscious or unconscious, that the future depends on electric technology, including electric vehicles and wind turbines.
In his announcement, Trump cited the world’s dependence on China for critical minerals. Over the last year-plus, China has used its dominance to counter threats of tariffs from the Trump administration, restricting exports of rare earth metals and lithium battery materials to the United States. In the end, China refused, but the episode made it clear who held the trump card.
The spat also shows how critical minerals are integral to the modern economy. Trump compared the new stockpile to the Strategic Petroleum Reserve managed by the Department of Energy, which was established after the oil embargo of the early 1970s.
“Just as we have long had strategic petroleum reserves and piles of critical minerals for national defense, now we are building these reserves for American industry, so we don’t have a problem,” Trump said.
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Oil reserves aren’t going away, but they’re not nearly as important as they once were, shrinking as productive U.S. oil wells and more energy markets are taken over by solar, wind, and batteries. (Solar and wind continue to dominate new electricity generating capacity, while more than 25% new cars sold worldwide are EVs or plug-in hybrids.)
It is unclear exactly which minerals will be included in the reserve; Bloomberg reports that gallium and cobalt will be included. It is possible that others such as copper and nickel were also thrown away, although this is not mentioned.
The size of the investment is recorded. The US Export-Import Bank provided $10 billion in loans, with private capital raising the rest. About half of the price of oil currently in the Strategic Oil Reserve goes to a market that is 1% of the global oil market, according to Bloomberg columnist David Fickling. pointed out.
The inconsistency is either typical Trump bluster or an acknowledgment that the critical mineral market will grow significantly in the coming years.
It could be both, with the greater possibility being the latter.
Much of the growth in critical minerals comes from clean energy technology and EVs; without them, the market would not be as limited as the experts predicted. Electronics demand, including data centers, will play a role, but more than half of the global growth in demand for rare earth elements will come from electric vehicles and wind turbines, according to to the IEA. For cobalt and lithium, the numbers are even more skewed, with EVs representing the majority of growth until 2050.
The Trump administration has not calmed down on this silently for clean energy technology, prefer to stay in the status quo with fossil fuels. But the rest of the world continues to move toward solar, wind, and batteries, driving demand for critical minerals. The recent stock shows that the market can be hard to ignore.