Trump launches $12B 'Project Vault' to bolster U.S. rare‑earth supply, stocks surge

Project Vault is designed as a demand‑side instrument to create near‑term purchasing power for critical minerals rather than a conventional, government‑owned stockpile. The program combines a roughly $2 billion private capital pool with a $10 billion loan facility from the U.S. Export‑Import Bank to give U.S. buyers and developers immediate access to financing. Financial markets reacted almost instantly: a cohort of U.S.-listed rare‑earth miners posted notable premarket gains as investors priced in the prospect of sustained government‑backed offtake and easier project finance. Implementation details — procurement rules, sourcing conditionality and loan mechanics — will determine whether the program primarily channels demand to domestic miners and processors or simply increases short‑term buying from global suppliers. Complementary, targeted interventions already under discussion illustrate potential operational models: a separate Commerce Department letter of intent details conditional financing for USA Rare Earth that mixes a $1.3 billion loan commitment and $277 million in direct federal funding with a contemporaneous $1.5 billion private raise to underwrite a magnet plant in Oklahoma and development of the Round Top deposit in Texas. That USA Rare Earth package would be disbursed against milestones through 2026–2028, includes equity warrants giving the government a modest ownership stake if exercised, and still leaves roughly $600 million of the project's roughly $4.1 billion cost to be sourced. Those milestone‑based terms show how Project Vault’s buying power could be paired with direct project financing to accelerate midstream capacity, but they also illustrate new trade‑offs: taxpayer exposure, the need for strict milestone oversight, and the importance of firm offtake or power arrangements. Near term, spot pricing and equity valuations are likely to stay elevated while market participants assess which projects secure financing and how quickly processing and magnet fabrication capacity can come online. Over the medium term, the initiative could lower financing costs for developers and improve project bankability if combined with onshore processing incentives, permitting reforms and credible long‑term offtake. If procurement rules lack domestic preference or conditionality, however, much of the increased purchasing could be satisfied from existing global suppliers, muting the policy’s industrial effect. Internationally, Project Vault signals a strategic intent to reduce dependence on dominant producers and could reshape diplomatic and trade interactions with key supplier nations. Ultimately, whether Project Vault translates into durable supply‑chain resilience will depend on contract design, allied coordination, and execution against the demanding operational milestones that midstream projects require.