US President Donald Trump is set to launch a strategic critical minerals stockpile as Washington ramps up its attempts to break China’s stranglehold on the mining and supply of key resources.<\/p>\n
The administration is set to invest $US12 billion ($17.2 billion) in seed money the US Export-Import Bank, a Trump administration official familiar with the plan has told Reuters.<\/p>\n
The investment marks Washington’s latest attempt to offset what policymakers view as Chinese manipulation of prices for lithium, nickel, rare earths and other critical minerals \u2014 vital for items from electric vehicles to high-tech weaponry \u2014 that has stymied American mining companies for years.<\/p>\n
China represents about 70 per cent of the world’s rare earths mining and 90 per cent of global rare earths processing.<\/p>\n
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That has given it a chokehold on the sector that has caused the US to nurture alternative sources of the elements, creating a stockpile similar to the national reserve for petroleum.<\/p>\n
During trade talks last year spurred by Mr Trump’s tariffs, the Chinese government restricted the exporting of rare earths that are needed for jet engines, radar systems, electric vehicles, laptops and phones.<\/p>\n
Sixty-day supply of key resources<\/p>\n
First reported by Bloomberg News, the venture, Project Vault, will combine private funding with a $US10 billion loan from the EXIM Bank to acquire and stockpile the minerals for automakers, technology companies and other manufacturers.<\/p>\n
What are critical minerals?<\/a><\/p>\n Australia is joining the European Union and the United States in establishing strategic reserves of critical minerals, but what do they actually do, and why are they so important?<\/p>\n The project has attracted interest from a wide range of American auto and technology companies.<\/p>\n Commodities trading firms Hartree Partners, Traxys North America and Mercuria Energy Group would manage the procurement of raw materials for the stockpile, the official told Reuters.<\/p>\n The stockpile is expected to include both rare earths and critical minerals as well as other strategically important elements that are subject to volatile prices.<\/p>\n Project Vault is intended to help the American auto industry while letting companies keep the risk off their balance sheets, the official said, comparing the logistics of the project to a Costco membership that allows for buying in large volumes.<\/p>\n Another goal is to allow for a 60-day supply of minerals for emergency use, the official said, noting mineral stockpiling is already underway.<\/p>\n An executive structure is expected to be set up for the project and EXIM is likely to have a board seat, the official added.\u00a0<\/p>\n Last month, a bipartisan group of US politicians introduced a bill to congress that would create a $US2.5 billion stockpile of critical minerals, a move aimed at stabilising market prices and encouraging domestic mining and refining.<\/p>\n Australia also stands to gain significantly from US attempts to increase supplies<\/a> of rare earth minerals.<\/p>\n In October last year, Mr Trump and Prime Minister Anthony Albanese signed a critical minerals and rare earths framework that would see $12.2 billion invested<\/a> into various Australian projects.<\/p>\n