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
It represents a major commitment to accumulate minerals deemed critical to the industrial economy – including the automotive, aerospace and energy sectors – and highlights Trump\u2019s effort to wean US supply chains from China, the world\u2019s dominant provider and processor of critical minerals.<\/p>\n
The project has participation from more than a dozen companies so far, including General Motors Co., Stellantis NV, Boeing Co., Corning Inc., GE Vernova Inc. and Alphabet Inc.\u2019s Google. Three commodities trading houses – Hartree Partners LP, Traxys North America LLC and Mercuria Energy Group Ltd. – have signed on to handle purchases of the raw materials to fill the stockpile.<\/p>\n
The US already operates a national stockpile of critical minerals to serve the country\u2019s defence-industrial base but doesn\u2019t have a stockpile for civilian needs. <\/p>\n
Under Trump, the US also has taken the rare step of investing directly in domestic minerals companies to boost the production and processing of rare earths at home.<\/p>\n
The Administration has already inked co-operation agreements with Australia, Japan, Malaysia and other countries on the issue. <\/p>\n
It will press even more nations to pursue such pacts during a summit of dozens of countries set to take place in Washington on Wednesday local time.<\/p>\n
The effort to reduce risk in the mineral supply chain gained new momentum last year, after China tightened export controls on some materials. <\/p>\n
That spurred some US manufacturers to dial back production and underscored the extent of Beijing\u2019s leverage.<\/p>\n
The new venture will offer participating manufacturers a way to insulate their businesses from swings in prices for key materials without having to maintain their own stockpiles.<\/p>\n
Those types of swings can expose companies to massive volatility in key raw material inputs that wreak havoc on balance sheets. For example, nickel saw a historic price surge shortly after Russia invaded Ukraine, fed by fears buyers would no longer be able to purchase the metal from Russia, a top supplier.<\/p>\n
Some details about Project Vault\u2019s structure were not immediately known, including the institutional investors providing the US$1.67b. <\/p>\n
The senior Administration officials said the project had been oversubscribed because investors are attracted by a credit-worthy group of manufacturers, their long-term commitments and the involvement of the US export-credit agency.<\/p>\n
The specific carrying costs that would be charged to those manufacturers, as well as the fees for the trading firms participating as procurement officers, weren\u2019t disclosed.<\/p>\n
Under the arrangement, companies that make an initial commitment to purchase materials at a specified inventory price later – and pay some up-front fees – will be able to present Project Vault with a shopping list of preferred materials they need.<\/p>\n
The project, in turn, will seek to procure and store the materials, with the manufacturers charged a carrying cost for the expenses associated with interest on the loan and holding the elements.<\/p>\n
Manufacturers will be allowed to draw down their material stash as long as the firms replenish them. In the case of a major supply disruption, they will be able to access all of it, the officials said.<\/p>\n
A key element in the venture\u2019s design is that manufacturers who commit to buy a specified amount of materials at a set price also commit to repurchase the same amount at that same cost in the future. The Administration sees that acting as a stabilising mechanism, helping suppress volatility.<\/p>\n
Sign up to Herald Premium Editor\u2019s Picks<\/a>, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week\u2019s best features, interviews and investigations. Sign up for Herald Premium here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The stockpile is expected to include both rare earths and critical minerals as well as other strategically important…\n","protected":false},"author":2,"featured_media":265340,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[2327,84426,8613,31123,138,607,4444,11728,151408,2178,25279,219,71,151411,3331,29746,7462,51024,300,111,139,69,90,193,2171,2572,8205,4889,8258,72231,25338,9939,151409,1521,19862,61,2179,9938,3040,151410,23898,102,15146],"class_list":["post-265339","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-2327","tag-20b","tag-billion","tag-blunt","tag-business","tag-china","tag-chinese","tag-critical","tag-criticalminerals","tag-donald","tag-earths","tag-economy","tag-from","tag-insulate","tag-launch","tag-manufacturers","tag-metals","tag-mineral","tag-money","tag-new-zealand","tag-newzealand","tag-nz","tag-on","tag-other","tag-plans","tag-president","tag-rare","tag-reliance","tag-seed","tag-shocks","tag-slash","tag-states","tag-stockpile","tag-strategic","tag-supply","tag-to","tag-trump","tag-united","tag-us","tag-us12","tag-vault","tag-with","tag-works"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/265339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=265339"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/265339\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/265340"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=265339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=265339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=265339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}