Shares of U.S.-listed rare earth mining companies surged on Monday after reports that President Donald Trump is preparing a sweeping initiative to establish a strategic stockpile of critical minerals, a move that would deepen Washington’s involvement in a sector long dominated by China and central to the global energy transition, defense manufacturing, and advanced technologies.
The proposal, known as Project Vault, would create a first-of-its-kind strategic critical-minerals stockpile tailored to support the U.S. private sector, according to Bloomberg News, which cited senior administration officials familiar with the plan. The initiative is designed to sharply reduce America’s reliance on China for rare earth elements and related materials used in electric vehicles, military systems, semiconductors, and other high-value technologies.
Under the plan, Project Vault would combine $1.67 billion in private capital with a $10 billion loan facility from the U.S. Export-Import Bank, creating a large pool of financing to support domestic mining, processing, and magnet manufacturing. The structure signals an aggressive effort by the Trump administration to mobilize both public and private capital to rebuild supply chains that have eroded over the course of decades.
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Investors responded quickly. MP Materials, the operator of the Mountain Pass mine in California and currently the only major U.S. producer of rare earths, rose about 4% in early trading. USA Rare Earth climbed roughly 7%, while Critical Metals Corp jumped around 8%, reflecting expectations that Project Vault could translate into guaranteed demand, government-backed financing, and improved pricing visibility for domestic producers.
The rally underscores how sensitive the sector is to policy signals. Rare earth mining and processing are capital-intensive, environmentally complex, and historically vulnerable to price swings driven by Chinese supply decisions. Any indication of long-term government support can significantly alter the investment case.
A White House spokesperson was not immediately available to comment, but administration officials have increasingly framed critical minerals as a national security priority rather than a purely commercial concern.
Reducing Dependence on China
China currently dominates the global rare earth ecosystem, accounting for the vast majority of processing capacity and magnet production, even when raw materials are mined elsewhere. This concentration has alarmed U.S. policymakers across multiple administrations, particularly as Beijing has shown a willingness to use export controls as a geopolitical tool.
Trump’s Project Vault fits into a broader strategy to reshore or “friend-shore” supply chains tied to strategic industries. By creating a stockpile explicitly designed to support private-sector use, the plan goes beyond traditional government reserves, such as the Strategic Petroleum Reserve, and instead aims to stabilize supply for manufacturers of EVs, weapons systems, and advanced electronics.
Some companies are already positioning themselves to benefit. USA Rare Earth has held discussions with Commerce Secretary Howard Lutnick, pitching its domestic mining and magnet manufacturing assets as part of the administration’s strategy. Those talks have reportedly led to a proposed deal that could provide the company with around $1.6 billion in funding, subject to conditions, and could include a U.S. government equity stake.
Such an arrangement would mark another step in Washington’s evolving approach, where the federal government is no longer just a regulator or buyer, but a direct investor in strategically sensitive industries.
Project Vault also builds on actions already taken by the Department of Defense. Last summer, the Pentagon struck a landmark agreement with MP Materials that included a government equity stake, a price floor to protect the company from market volatility, and a long-term commitment to purchase specified quantities of rare earth materials and magnets.
That deal was widely seen as a turning point, signaling that the U.S. government is willing to use balance-sheet support and long-term offtake agreements to ensure domestic capacity survives against cheaper Chinese competition.
If implemented, Project Vault could reshape the U.S. rare earth industry by lowering financing costs, reducing market risk, and accelerating investment in downstream processing and magnet production, areas where the U.S. is particularly weak. Analysts say the initiative also reflects a recognition that market forces alone may not be sufficient to rebuild supply chains that China spent decades consolidating with state backing.
More broadly, the plan highlights how industrial policy has become central to U.S. economic strategy under Trump, especially in sectors tied to national security and technological leadership. This indicates for investors that rare earths are no longer a niche commodities play, but a policy-driven strategic asset class.