Watch: Trump announces a plan to create a strategic reserve of rare earth elements

WASHINGTON (AP) — The Trump administration plans to deploy nearly $12 billion to create a strategic reserve of rare earth elements, a stockpile that could interfere with China’s ability to use its dominance of these hard-to-process minerals as leverage in trade talks.

Watch President Donald Trump’s announcement in the Oval Office in the video player above.

President Donald Trump on Monday announced the start of “Project Vault,” which will be initially funded with a $10 billion loan from the U.S. Export-Import Bank and approximately $1.67 billion in private capital. The minerals held in reserve would help protect manufacturers of cars, electronics and other goods from any supply chain disruptions.

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During trade talks last year, spurred by Trump’s tariffs, the Chinese government restricted the export of rare earth elements needed for jet engines, radar systems, electric vehicles, laptops and phones.

“We never want to go through what we went through a year ago,” Trump said, in an apparent reference to the confrontation with China, adding that “it worked out in the end.” The president said he expects the government to make a profit from the loan, which is used to start the reserve.

China accounts for about 70% of the world’s rare earth extraction and 90% of the world’s rare earth processing. This gave it a stranglehold on the sector that prompted the United States to patronize alternative sources of the elements, creating a stockpile similar to a national reserve of oil.

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The strategic reserve is expected to be the highlight of the Ministerial on Critical Minerals that Secretary of State Marco Rubio will host at the State Department on Wednesday.

Vice President J.D. Vance intends to deliver a keynote speech at the meeting, which is planned to be attended by officials from dozens of European, African and Asian countries. The meeting is also expected to include the signing of several bilateral agreements to improve and coordinate supply chain logistics.

The Foreign Ministry said in its statement announcing the meeting that the meeting “will create momentum for cooperation” among participants to secure access to rare earth elements.

The government-backed loan will finance the reserve for 15 years. The US government has previously taken stakes in rare earth miner MP Materials, as well as providing financial support to Vulcan Elements and USA Rare Earth.

Bloomberg News was first to report the creation of the Strategic Rare Earths Reserve.

Trump announced the reserve in the presence of General Motors CEO Mary Barra and mining billionaire Robert Friedland in the Oval Office, along with other members of his administration and congressional leaders.