The Trump administration has unveiled a US$12 billion plan to create a 60-day strategic buffer of critical minerals for US consumers, aiming to shield industries from price shocks and supply disruptions.
However, analysts at Wood Mackenzie warn that while the initiative may ease short-term risks, it falls short of addressing structural vulnerabilities in America’s mineral supply chain.
Officially titled the U.S. Strategic Critical Minerals Reserve, Project Vault blends a US$10 billion Export-Import Bank (EXIM) facility with US$2 billion in private capital.
The fund will be used to purchase and store minerals considered vital to the US defence, automotive, and technology sectors.
The reserve is intended to offer near-term protection against market volatility while supporting new project financing through guaranteed offtake agreements.
EXIM-backed deals provide emerging producers with assured buyers, encouraging continued investment in global critical minerals developments.
“Project Vault introduces a meaningful buffer against market volatility and gives EXIM-backed projects greater offtake certainty,” said James Willoughby, Principal Research Analyst – Energy Transition & Battery Raw Materials at Wood Mackenzie.
“That financing stability could help unlock new supply.”
Wood Mackenzie estimates that the effectiveness of the reserve will depend heavily on how funds are allocated.
If spending is distributed evenly across all 44 designated critical minerals, the stockpile would only cover about 45 days of national demand.
Concentrating resources on niche, less-liquid metals could achieve the 60-day target for select materials, but leave others undersupplied.
Despite its size, the program will not eliminate long-standing weaknesses in the supply chain.
The US is fully import-dependent for 15 critical minerals and imports more than half its supply for another 32, according to the US Geological Survey.
The most severe constraint lies in midstream processing.
Much of the raw material mined domestically still requires overseas refining, largely in China.
“Stockpiling is not a silver bullet,” said Willoughby.
“Without domestic permitting reform, stronger allied supply partnerships and meaningful midstream capacity expansion, the underlying dependency remains.”
Wood Mackenzie highlighted additional procurement risks stemming from the program’s transparency.
“The government has effectively shown its hand,” said Willoughby.
“Suppliers now have greater leverage, which could push procurement costs higher.”
Although the required volumes account for less than 1 per cent of global demand for most targeted metals, purchases could distort smaller markets such as antimony, where acquisitions might reach up to 3 per cent of global demand.
China may also respond strategically.
Having previously restricted exports of rare earths to Japan in 2010 and graphite to Sweden in 2020, Beijing already maintains export licensing mechanisms for several key resources.
“Retaliatory measures cannot be ruled out,” Willoughby added.
“The durability of Project Vault will be tested during commodity downturns and in the event of geopolitical escalation.”
The US has precedent for such initiatives — Cold War-era Defence Logistics Agency stockpiles were mostly liquidated after 1993 as maintenance costs grew and political priorities shifted.
Project Vault may face similar pressure, with annual operating expenses potentially exceeding US$1 billion for warehousing, insurance, and financing.
Many minerals also require specialised storage and regular rotation, unlike crude oil stored in the Strategic Petroleum Reserve.
Willoughby noted that Project Vault should be seen as a limited but useful step, describing it as a tactical buffer rather than a full solution.
However, he added that within the wider framework of the US critical minerals strategy, it still fulfils a clear and important role.
