A wheel loader operator loads ore onto a truck at the MP Materials rare earth mine in Mountain Pass, California, USA, January 30, 2020.
Steve Marcus | Reuters
A new race to secure critical minerals is unfolding across the global economy.
From Washington’s proposed $12 billion Project Vault stockpile to expanded buffers in Asia and the European Union, governments are moving to secure access to metals increasingly seen as critical to national security and industrial policy.
“Metals and minerals is where the latest wave of stockpiling is most evident,” said Patrick Schroeder, a senior fellow at Chatham House. He said the government was trying to reduce the impact of concentrated supply chains and export restrictions.
In the United States, officials recently outlined an approximately $12 billion strategic mineral reserve called Project Vault. The initiative aims to strengthen the resiliency of U.S. industrial supply chains by building stocks of rare earths and other essential metals needed for electrification, defense, and advanced manufacturing.
Project Vault complements other efforts such as the Forum on Resource Geostrategic Engagement (FORGE), a partnership that coordinates critical mineral policy pricing and projects, and Pax Silica, which focuses on securing AI-related supply chains.
Last year saw a major shift in the approach to strategic stockpiling, with a particular focus on metals.
In January, Australia announced plans to formalize a nationally supported reserves strategy through an $800 million Strategic Minerals Reserve, prioritizing antimony, gallium and rare earth elements.
The European Union is also moving ahead with plans to build a joint stockpile of critical raw materials under the RESourceEU strategy. Italy, France and Germany are expected to lead the effort, Reuters reported earlier this month, citing sources familiar with the matter.
Just last week, India and Brazil agreed to deepen cooperation on critical minerals and rare earths, as New Delhi seeks to diversify supply sources and reduce dependence on China. The agreement aims to strengthen bilateral trade and build more resilient supply chains for materials essential to the clean energy, technology and defense industries.
Earlier this year, South Korea rolled out a comprehensive critical minerals strategy with approximately $172 million in state aid. Based on this strategy, the government plans to expand stockpiles and infrastructure.
“We are definitely seeing a shift towards a more resource nationalist mindset in many countries,” Schroeder said. “It is a slippery slope at the moment, and as measures become coercive, lack transparency, and become weaponized, strategic stockpiles could become hoarded.”
Is “resource nationalism” underway?
The strategic shift marks what some analysts describe as a structural shift in commodity policy.
“The metals supply chain is fragile,” said ING’s Ewa Mansey, pointing to years of underinvestment, long permitting timelines and geographical concentration. In early cycles, higher prices typically accelerated mine supply and reduced the need for strategic inventories, he said.
“Nowadays, even when prices are high, new supply is slow and uncertain, so inventories themselves are becoming part of the supply strategy,” Manthey added, characterizing a move with a decidedly “nationalist element.”
Natalie Scott Gray, senior metals analyst at StoneX, described the trend as “resource nationalism and turning back the clock,” referring to China’s long-standing practice of building strategic stockpiles of metals and releasing them when supply is short or to cool domestic prices.
China dominates rare earth processing and controls much of the world’s industrial metal refining capacity. Even when reserves are geographically dispersed, processing often remains centralized.
The International Energy Agency has repeatedly warned that the concentration of critical mineral supply chains poses security vulnerabilities.
China’s rare earth export controls announced last year pose serious national and economic security risks around the world and could severely impact key sectors such as energy, automotive, defense, aerospace, artificial intelligence and semiconductors, the agency said.
Historically, stockpiles were primarily an emergency buffer against temporary disruptions and price spikes, industry watchers say. Schroeder said today’s efforts are more clearly driven by the need to buffer against geopolitical factors and reflect a broader shift in how resource security is framed as industrial strategy and national security rather than just crisis management.
“This cycle of commodity stock formation is unlike anything we’ve seen in the past,” said Anushree Ganeriwala, global analyst at the Economist Intelligence Unit.
“In the past, commodity cycles were primarily driven by traditional supply and demand imbalances and weather shocks. What is different now is that policy and geopolitical risks are directly shaping market outcomes.”
In February, Goldman Sachs characterized the recent surge in commodity demand for gold and industrial metals as “insurance-type demand.”
Analysts expect government stockpiling to accelerate, particularly for energy transition and defense-related metals.
“We’re still in the early stages,” Scott Gray said. “Governments are now treating supply chains as national security infrastructure rather than pure commercial flows.”
