Project Vault: The US$12bn critical minerals stockpile could rely on these ASX companies

Detailed summary

Project Vault could change the game for ASX critical minerals stocks, with traders in the US$12bn stockpile casting a wide ... Read More The post Project Vault: The US$12bn…

The US is building a critical minerals stockpile to secure its future supply. Pic: Getty Images

In February this year, Washington announced its biggest bid yet to take control of its destiny in critical minerals.

Project Vault is a US$12bn initiative to stockpile minerals the US government no longer wants to be reliant on geopolitical rival China to procure.

It dovetails with other regulatory changes designed to remove the risk associated with Chinese materials from America’s defence supply chain. As of January 1, 2027, defence contractors will be unable to purchase items like rare earth magnets, tungsten, tantalum and molybdenum from China, Russia, Iran and North Korea.

That’s a tough ask. China produced well over 90% of rare earth magnets, its dominance extending to close to 60% of mined magnet rare earths as of 2024.

For other critical minerals, the story is similar. Project Vault is one of many government interventions to address that critical risk, which has left the US vulnerable to commercial leverage from China – its export controls on a host of metals a case in point.

The largest share of funding for Project Vault comes in the form of a loan of up to US$10bn from the US Export-Import Bank. That should give a sense of the importance of the program to the country’s military and technological security – it’s more than double the size of any loan awarded to a single project by EXIM.

And to give a sense of how its funding priorities have changed, the previous two record loans were for major fossil fuel projects – Saudi Arabia’s Sadara Petrochemical Project and Total’s Mozambique LNG.

A number of Aussie projects have been pushed forward by EXIM financing support as part of the $13bn Australia/US Critical Minerals Framework Agreement. More on that here.

Opening of the article, excerpted from Stockhead. To read the rest, open the article on the publisher's site.