Project Vault: The U.S. Move to Break China's Grip on Critical Minerals

Understanding the U.S. push to diversify supply chains-and why metals like silver may see rising demand

What Is Project Vault?

The U.S. government has launched a major new initiative called Project Vault, a roughly $12 billion strategic stockpile of critical minerals designed to reduce dependence on foreign supply chains, particularly China's dominance in rare earths and other essential materials.

Under the plan, the U.S. Export-Import Bank (EXIM) has approved its largest loan ever (about $10 billion), paired with nearly $2 billion in private capital, to procure and store key critical minerals. These minerals include rare earth elements that are vital inputs for advanced manufacturing, electronics, defense systems, artificial intelligence (AI), and electric vehicles (EVs).

The goal is to build a domestic and allied reserve to safeguard the U.S. industrial base against supply disruptions that have historically been shaped by China's outsized control of mining and processing infrastructure.

Why Is the U.S. Investing in Its Own Supply Chain?

For years, China has held an overwhelming advantage in critical mineral markets, controlling roughly 70% of rare earth mining and processing capacity depending on the element. These critical inputs are not just "nice to have". They are necessary for microchips, sensors, high-performance magnets, defense systems, batteries, and other technologies fundamental to modern economies and national security.

Project Vault represents a strategic shift in federal policy, not merely supporting producers with loans, but underwriting long-term demand, stabilizing supply, and creating price and procurement frameworks that can give U.S. manufacturers clearer visibility into future availability.

Instead of relying on spot markets dominated by foreign producers, the government is trying to ensure preferential access to material reserves for domestic and allied industries, much like the Strategic Petroleum Reserve does for oil.

Building a Western Supply Chain Beyond China

Project Vault is only one piece of a broader U.S. strategy to forge new critical minerals partnerships with allies.

Recently, the U.S. announced coordinated efforts with Mexico, the European Union, and Japan to strengthen supply chains and explore minimum "price floors" for critical minerals.

Price floors are designed to prevent foreign producers from undercutting Western mining and processing industries with artificially low pricing, which is an issue that has historically squeezed competitors, particularly when China can flood markets at low cost.

These price-floor discussions are happening within formal action plans and trade policy dialogues:

• The U.S. and Mexico will explore border-adjusted price floors and coordinated trade rules for critical minerals.
  
• Alongside the EU and Japan, coordinated policies could underpin a block of market-oriented economies working together on supply chain resilience.
  

Taken together, these efforts aim to counter China's leverage in essential inputs and make the Western industrial base more resilient and diversified.

Why This Matters for Silver

Silver is often overlooked in discussions about critical minerals, but it plays an important role in electronics, AI data centers, EVs, solar panels, and defense systems-all areas where critical mineral supply chains now command policy focus.

Here's why initiatives like Project Vault and coordinated price floors could impact silver demand and prices:

1. Silver Is Officially Recognized as critical.

In November 2025, the U.S. Geological Survey officially added silver to the critical materials list, a recognition of its strategic importance to advanced manufacturing and national security.

2. Broader Demand From Tech and Defense

As AI, EVs, solar energy, and defense technologies expand, silver's industrial demand continues to grow. Markets that rely on rare earths and other critical inputs also rely heavily on silver-for electrical conductivity, sensors, and specialized components. Policies that strengthen supply chains for these systems simultaneously bolster demand fundamentals for silver.

3. Stockpiling Could Support Steadier Demand Signals

Project Vault represents federal underwriting of long-term demand for critical materials; if it continues or expands, that could act as a floor under industrial metals prices, including silver-particularly if similar policies are adopted by allied trading partners.

4. Price Floors Reduce Market Volatility

Coordinated price floors with Mexico, the EU, and Japan could stabilize mineral markets more broadly. When markets have fewer extreme price swings, industrial consumers are more likely to invest in technologies that use silver intensively, which could support upward price pressure over time.

In Summary

Project Vault and allied price-floor initiatives mark a new era in U.S. policy toward critical minerals, supply-chain security, and strategic industrial metals. By building stockpiles and deepening cooperation with Mexico, the European Union, and Japan, policymakers are aiming to break longstanding dependencies, particularly on China.

For silver specifically, these developments reinforce a backdrop of growing industrial demand, acknowledged strategic importance, and potential structural supports on pricing and supply availability. As governments and manufacturers focus on technology, defense, and energy resilience, metals like silver may find themselves in an even stronger demand environment.

Call us at 855-271-2873 to review your silver options while availability and pricing remain favorable.