The Zhitong Finance App learned that the “Project Vault” (Project Vault), a key mineral reserve program supported by the US government, plans to select the first batch of more than 10 US manufacturers and provide them with loans of up to 1 billion US dollars to help them procure key materials.
VaultCo, established by the Trump administration, is responsible for operating the project. The company's executive chairman Brett Lambert said in an interview on Wednesday that VaultCo is currently in talks with more than 70 companies from both supply and demand sides in key mineral markets to push these companies to participate in the program.
Lambert said, “We are likely to announce loans of hundreds of millions of dollars, and possibly up to $1 billion, to original equipment manufacturers (OEMs) applying to use the Vault Reserve Facility. More than 10 companies will be selected in the first batch, and more than 10 companies will join soon thereafter.”
The first selected companies will mark significant progress in advancing the Vault project. The Trump administration announced the $12 billion plan earlier this year. The reserve plan aims to reduce America's dependence on China's dominant position in the production and refining of various key materials, thereby reducing the supply risks faced by the US.
Lambert said that the list of manufacturers selected for the program will not be publicly disclosed at this stage; however, relevant announcements may explain the types of minerals these companies are applying for procurement. In addition to metals and minerals, manufacturers also request procurement requirements for specific magnets, powders, alloys, and other materials that have been processed to meet their specific needs. Lambert said that these demands highlight the increasing degree of specialization in the US industrial supply chain.
Lambert said, “There is no particular mineral that stands out, but I was surprised by the extent of these procurement requirements. When it comes to the Vault project, people might think this is a large railway yard with rocks covered with tarps. But that's not the case. These are all specialty alloys and material assets with clear uses.”
In September of this year, commodity traders Glencore and Mercer Energy Group said that the two companies will receive a total of 1 billion US dollars in financing from the Export-Import Bank of the United States to purchase key minerals for the reserve program.
Unlike traditional government-led reserve programs, the Vault project will be designed as a demand-driven mechanism where manufacturers decide which minerals need to be included in the reserve. The plan aims to enhance the bargaining power of US companies and help them cope with mineral markets with opaque information and fragmented market structures. In these markets, it is often difficult for individual buyers to efficiently purchase smaller quantities of minerals and obtain transparent prices.
Lambert said that the Vault plan will not disclose the exact amount of minerals to be purchased to avoid affecting prices in the relatively small and often illiquid mining market. He said, “We want to be very careful to avoid affecting the market. We will work with traders and market participants to arrive at the most profitable deal possible.”