“Project Vault” Takes Aim at Broken Critical Mineral Markets

The United States may finally be serious about breaking China’s control over minerals that are critical for commercial and defense technologies.

The announcement of “Project Vault” on February 1, which proposes a $12 billion critical mineral stockpile, marks a shift from rhetorical concern to market-shaping policy. Project Vault features private sector forward purchase commitments that guarantee future demand at fixed prices for key industrial and technology minerals. Backed by a combination of loan support from the U.S. Export-Import Bank (EXIM) and commitments from General Motors and other major off-takers — purchasers who enter long-term agreements to buy large portions of future output — the project represents a sustained challenge to China’s monopoly on critical minerals. 

Policymakers have long warned against dependence on Chinese-dominated critical minerals supply chains without confronting why private capital has failed to develop alternatives. When the Chinese government can use its market domination to undercut prices artificially, banks will not lend to potential competitors. If done correctly, Project Vault can change that calculus by restoring price certainty.

China’s Critical Mineral Dominance Is Engineered, Not Market-Based

Chinese-controlled critical mineral supply chains underpin modern defense systems, advanced manufacturing, and information and communications infrastructure. Rare earth elements — a subset of critical minerals — are essential for precision-guided munitions and fighter aircraft while lithium, nickel, and cobalt power batteries across civilian and military platforms. Gallium and germanium are vital for semiconductors and telecommunications. 

China dominates the global supply chains for these minerals, particularly at the processing and refining stages. This dominance is not the product of pure market efficiency.  Beijing has used subsidies, opaque state financing, low labor and environmental standards, and non-market pricing to push competitors out of business. The result is a global investment drought in these critical minerals, even in countries like the United States with viable mineral deposits and strong technological capacities.     

China has paired market manipulation with direct economic coercion. Recently, Beijing has imposed export controls on gallium, germanium, and other critical minerals, citing national security concerns. These actions have often coincided with disputes with the United States and its allies, demonstrating Beijing’s willingness to weaponize supply access.   

Why Forward Purchase Commitments Matter

While the program’s stockpile will likely only provide temporary relief in the event of a crisis, it could be effective in reshaping incentives before supply chains break. Project Vault’s most consequential feature is that off-takers would agree to purchase materials at a specified inventory price, which essentially sets price floors. This would protect investors and off-takers from the massive volatility in the price of key mineral inputs that render most projects economically non-viable. A blend of private capital and loans from EXIM will finance the purchases.

By stabilizing prices, Project Vault could make more critical mineral mining and processing projects bankable. For lenders and equity investors, guaranteed future demand matters more than short-term spot prices. Project Vault could reduce private sector exposure to predatory Chinese price cuts and provide the revenue certainty that a large, capital-intensive project needs. This demand-side approach reflects the key insight that supply chain resilience requires countering non-market manipulation with credible market signals.

The Devil Is in the Details

Project Vault should not just be another government stockpile. It should seek to stabilize broader commercial investments in critical minerals. Its design should reshape investment incentives — not just the accumulation of minerals.  

Forward purchase commitments should be long-duration and large enough to influence financing decisions for mining, processing, and refining projects. Coordination with allies will be essential to avoiding fragmented markets and competing subsidy regimes. The Critical Minerals Ministerial meetings this week in Washington present an important opportunity to advance that coordination and determine more details about the program, including the target minerals. Project Vault could become the first critical mineral policy to restore market discipline, reduce exposure to economic coercion, and unlock private investment that has been blocked by Chinese non-market practices for decades. 

Dan Swift is a senior research analyst for economics, finance, and trade for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). For more analysis from Dan and FDD, please subscribe HERE. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.