‘Project Vault’ Wins Some Metals Industry Support as Stocks Gain

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(Bloomberg) — The US government’s planned $12 billion initiative to stockpile critical minerals is winning support from parts of the metal markets, while raising doubts elsewhere about how effective the initiative will be.

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Critical minerals span everything from aluminum to zinc, but it’s smaller, niche markets such as rare earths where federal buying is more likely to move prices and impact trade flows. Developers with ties to the Trump administration reacted more strongly than larger, established miners. MP Materials Corp. jumped as much as 7% on Monday, while Almonty Industries Inc. rose 9.7% before paring gains. 

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Aclara Resources Inc., which recently secured US funding for a mine in Latin America, said government stockpiling could help get more projects off the ground. An analyst at William Blair & Co. called the plan “a major tail wind” for rare earths.

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“Industrial clients are reluctant to provide take-or-pay contracts given the early-stage nature of many initiatives,” said Aclara Chief Executive Officer Ramon Barua. By stepping in as a buyer, the government can help finance alternative supply chains and “bridge that gap,” he said.

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The Trump administration’s venture — dubbed Project Vault — would combine $1.67 billion of private capital with a $10 billion loan from the US Export-Import Bank to procure and store minerals for automakers, technology companies and other manufacturers. Ex-Im’s board is scheduled to vote later Monday to authorize the record-setting 15-year loan, more than double the bank’s previous largest deal.

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MP Materials, in which the Pentagon agreed to make a $400 million equity investment in July, was up 3.6% at 2:08 p.m. in New York while tungsten miner Almonty had pared gains to 0.2%. USA Rare Earth Inc. rose as much as 16% before retreating, while United States Antimony Corp. was up 10%. 

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The efforts are part of the government’s push to shore up supply chains critical to autos, aerospace and energy. While details remain limited, the scale alone sets Project Vault apart from earlier proposals and signals a return to a more interventionist federal role in physical commodity markets.

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The initiative shows the administration’s “major focus on rare earth” and it’s “determination to take control back from China,” wrote William Blair’s Neal Dingmann, who expects further government funding for rare earth providers and customers.

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The approach builds on US inventory accumulation that’s already underway. Exchange warehouses and trade data show rising stockpiles of copper, platinum and palladium over the past year, blurring the line between commercial inventories and state-backed strategy as government-supported investments proliferate across metals markets.

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US officials “want to make sure they’re reducing their external vulnerabilities in terms of metal supply chains,” said Helen Amos, commodities analyst at BMO Capital Markets. “They’re investing directly in equity, they’re building up stockpiles and looking at strategic partnerships with trading companies,” Amos said. “They’re coming at it from all possible angles.”