Washington digs in on rare earths

For something called “rare” earths, stories about them are pretty common these days.

Here’s the latest: The White House is poised to create a $12 billion stockpile of critical minerals like gallium and cobalt in an effort to reduce US reliance on China, according to Bloomberg, which first reported the news.

Dubbed Project Vault, which sounds like a nefarious government plan to create the world’s greatest pole vaulter ahead of the summer Olympics, the idea has merit. The US already has a strategic oil stockpile, and in fact there’s already a national stockpile of critical minerals dedicated solely to the country’s defense industry needs. The difference is that Project Vault would be for civilian needs, focused on accruing critical minerals and rare earths for automakers, tech companies, and US manufacturers.

The project already has the backing of several major corporations who’d love nothing more than a steady supply of critical minerals, including General Motors, Boeing, GE Vernova, Corning, and more.

Critical calm

Critical minerals are just that: critical. They’re found in everything from cellphones to automobiles to missiles. The problem is that China controls an estimated 85% of the world’s critical mineral processing capacity, and while trade war rhetoric between the US and China has cooled lately, the Trump administration has made it clear that securing critical minerals is vital to national security.

That’s why the government has made deals with the likes of MP Materials, USA Rare Earth, Trilogy Metals, and Lithium Americas over the last year—and every time a new deal was announced, it would bolster an individual stock.

But today’s news is good for miners across the board: Project Vault not only underscores the country’s commitment to securing critical minerals beyond piecemeal, individual investments, it will also create more demand for mining these minerals in general. And if the trade war heats up once again, it could serve to keep critical mineral prices steady, in turn keeping business cycles for miners less volatile.

Now if only the news cycle was a bit less volatile.—MR