Since the COVID pandemic, Americans have taken a crash course in the importance of rare earth elements and have come to grips with the unpleasant reality that the People’s Republic of China (PRC) has nearly taken control of their mining and processing. Virtually everything we manufacture in the modern world, from fighter jets to medical equipment to cameras, now requires some amount of these materials, and we are almost entirely at the mercy of the People’s Republic of China for them.
Recognizing that this dependence is a potential national security crisis, President Donald Trump has led a whole-of-government initiative, called “Project Vault,” to protect the American people from immediate shocks while building our ability to provide for ourselves in the future.
The Chinese regime has shown itself very willing to use its advantage in rare earths as blackmail against the United States and industrial allies such as Japan. At the end of President Trump’s first term, China made veiled threats about restricting its exports in retaliation for US tariffs on Huawei. These threats became reality last year when China announced export controls and then an outright ban on the export of rare earths to foreign militaries. When President Trump himself issued tariff threats, the PRC backed down, but the extent of our vulnerability was clear.
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It’s fair to say that a large part of this problem is self-inflicted. After World War II, at the dawn of electronics manufacturing, the United States was dominant in rare earth metals, which were mined and processed primarily at the Mountain Pass plant in California. However, in 1980, the Nuclear Regulatory Commission under President Jimmy Carter placed some rare earth metals under the same regulations as radioactive materials, severely restricting their mining and processing and making even these limited activities prohibitively expensive in the United States.
The resulting decline in production was precipitated by the 1996 Mountain Pass wastewater spill, which resulted in the closure of that plant in 2002 for environmental reasons. No additional projects were developed, as the average permit period in America is 29 years, and would therefore not have been economically viable. Mountain Pass only resumed operations in 2017, but now, with the support of the Trump administration, will expand its facilities in 2026. But it will be a long and difficult battle to regain the advantage America once squandered in the name of climate purism.
Meanwhile, China seized the advantage with a much more relaxed regulatory and licensing environment, allowing the country to capture as much as 70% of the mining and 90% of the processing of rare earths. During his first term, President Trump began to correct this disproportionate advantage with Executive Order 13817, which identified 35 key elements and laid out a strategy to secure a ready supply of them. In 2020, the President declared a national emergency regarding rare earths, leading an interagency process to increase domestic production.
Following President Trump’s re-election, his administration has taken further action to mitigate China’s dizzying lead through agreements with manufacturing allies like Australia that will give us a much more secure and reliable supply chain than buying from communist China. Now Project Vault is designed to further protect America from dependence on the People’s Republic of China for these vital materials.
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Modeled after the Strategic Petroleum Reserve, established in 1975 to protect the US from the energy shocks caused by the 1973 Arab oil embargo, Project Vault is creating a stockpile of rare earths for use by the US military and the private sector in the event that China were to cut off supplies.
Additionally, the administration is continuing the hard work of deregulating and allowing reforms that will allow American companies to begin mining and processing rare earths here at home again, unburdened by the Biden administration’s “environmental justice” efforts such as the Justice40 Initiative, which have prevented them from taking meaningful action in this area.
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To counter the PRC’s predatory maintenance of its monopoly on rare earths, President Trump, as a matter of national security, has directed the Export-Import Bank to support Project Vault with a $10 billion loan that will both support stockpiling and ensure sufficient new U.S.-controlled production of rare earths at a pace that will ensure that our defense industries are no longer at the mercy of the PRC’s supply chains China.
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ExIm has formed a public-private partnership called Vault Company to oversee the project and ensure taxpayer dollars are invested responsibly so that the U.S. extractive and processing sector can quickly recover and eliminate the need for further investment.
As such, ExIm is an indispensable national security tool for repairing all the damage China has done in its campaign to corner the rare earths market and use their dominance to blackmail America. Congress must therefore take swift action to reauthorize the Bank to ensure not only that Project Vault succeeds, but also that ExIm can continue to support President Trump’s efforts to protect the American people from Chinese aggression.
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