Beijing dominates the global supply of rare earths critical for modern technology

US President Donald Trump is set to build a strategic stockpile of critical minerals to reduce reliance on supplies dominated by China, Bloomberg has reported, citing sources.

Rare-earth minerals, used in technologies ranging from smartphones and electric vehicles to advanced weapons systems, have become a flashpoint in global trade. China dominates more than 90% of global rare-earth refining and nearly all permanent magnet production, giving it decisive control over supply chains vital to modern industry and defense.

People familiar with the matter told the outlet on Monday that Trump's initiative, dubbed Project Vault, will combine private funding with a $10 billion loan from the US Export-Import Bank to acquire and store critical minerals. The stockpile is intended to shield manufacturers from price volatility and supply disruptions.

More than a dozen major companies, including General Motors, Boeing, and Alphabet's Google, have reportedly joined the effort.

In April 2025, China introduced export controls on certain rare-earth elements used in military applications, citing national security concerns. Beijing later expanded the restrictions with stricter licensing requirements and extraterritorial provisions affecting exports linked to the US defense and semiconductor sectors. Following a meeting between Trump and his Chinese counterpart, Xi Jinping, in October in South Korea, China agreed to suspend the latest controls for one year in exchange for reciprocal US tariff reductions. Despite the temporary reprieve, Washington has accelerated efforts to diversify supply chains, signing deals with multiple countries, including Australia, Japan, and Ukraine.

Global interest in rare-earth minerals has surged amid escalating trade tensions between the world's two largest economies. The International Energy Agency forecasts a 30-fold surge in demand for minerals such as lithium and cobalt by 2040, driven by the rapid growth of electric vehicles and battery storage systems.

Russia has also moved to strengthen its position. President Vladimir Putin has instructed the government to develop a long-term strategy for rare-earth mining and production. Russia holds an estimated 658 million tons of rare metals, including 28.5 million tons of 15 rare-earth types, reserves it says are sufficient to meet the country's long-term domestic needs.