ANALYSIS
Published: Tuesday, May 26, 2026
The Trump administration’s US$12 billion (bn) Project Vault initiative is poised to reshape global critical minerals trade flows and could intensify US engagement with Latin America’s mining sector as Washington seeks to reduce strategic dependence on China.
According to S&P Global’s Critical Minerals Briefing, the creation of a US strategic stockpile reflects how critical minerals have moved “to the center of economic and national security,” particularly after China’s export controls on rare earths and other strategic materials disrupted global supply chains.
The report argues that supply chain concentration is no longer “a theoretical concern” but “a tangible and increasing risk,” citing China’s dominant role in both mining and refining rare earths, gallium, graphite, tungsten and germanium.
That backdrop is likely to increase the strategic relevance of Latin American suppliers of lithium, copper, graphite, rare earths and other minerals included in the US Geological Survey’s critical minerals list, particularly as Washington attempts to diversify sourcing away from Chinese-controlled supply chains.
Stockpiling as industrial policy
S&P Global describes Project Vault as an “ambitious policy proposal” backed by a US$10 billion (bn) loan from the US Export-Import Bank (EXIM) and nearly US$2 billion (bn) in private sector investment.
Unlike traditional state-controlled reserves, the mechanism is designed as an OEM-driven system in which manufacturers identify which minerals they need and financially commit to securing them in advance.
The stockpile will cover all 60 minerals on the US critical minerals list, including lithium, copper, graphite, nickel, cobalt, rare earth elements, gallium, scandium, tungsten and niobium.
S&P Global says the initiative signals “the US administration’s willingness to leverage the federal balance sheet to secure the supply of critical minerals.”
For Latin America, that could translate into stronger US interest in securing long-term access to regional mineral production through investment partnerships, financing arrangements and supply agreements.
Chile and Argentina – already central to global lithium supply – could see renewed strategic attention, while Brazil’s rare earths, niobium and graphite resources may become increasingly relevant under a broader US diversification strategy.
Traces of several rare earth elements have been found in Mexico, primarily cerium, lanthanum, neodymium, terbium, samarium and europium. The Mexican Geological Survey estimates there are approximately 1.7Mt of these valuable elements in the country.
Processing gap remains a key issue
The S&P report also highlights a major structural weakness in the US strategy: the lack of domestic refining and processing capacity.
“Given that the US lacks industrial capacity to process most critical minerals, the most practical choice in the short to medium term is to stockpile a processed material that can be used directly by US companies,” the report states.
That limitation could create opportunities for mining jurisdictions capable not only of extracting minerals, but also moving downstream into refining and value-added processing.
The report notes that processed materials are more relevant for downstream industries but also significantly harder and more expensive to store due to degradation risks, environmental controls and warehousing requirements.
Lithium hydroxide, for example, requires controlled storage conditions because the material absorbs moisture and degrades more quickly than raw materials such as brine or spodumene ore.
That dynamic may reinforce policy debates already underway in several Latin American countries over whether the region should prioritize exports of raw minerals or accelerate development of local processing industries.
China paradox
One of the report’s central conclusions is that Project Vault may not significantly reduce dependence on China in the near term.
“One of the most striking ironies of Project Vault is that, while it is designed to reduce US dependence on China for critical minerals, much of the stockpile will likely originate from Chinese-controlled supply chains,” S&P Global said.
The report adds that China still maintains decisive leverage because of its dominance in mineral refining and processing.
This paradox could have direct implications for Latin American miners, many of which already rely heavily on Chinese financing, processing capacity and offtake agreements.
The geopolitical tension between Washington’s push for supply diversification and Beijing’s entrenched role in the sector may increasingly place Latin American producers at the center of competing industrial strategies.
US companies position for Vault
A U.S. Critical Materials spokesperson told BNamericas in February that its Sheep Creek project in Montana could become “a cornerstone asset” for future domestic stockpiling efforts because of its rare earth and gallium potential.
The company said Sheep Creek hosts high-grade gallium and several minerals included on the US Geological Survey critical minerals list, including neodymium, praseodymium, niobium, samarium, scandium and dysprosium.
Gallium has become strategically important because of its use in semiconductors, defense electronics, 5G infrastructure and satellite systems – sectors directly linked to the industries Project Vault is designed to protect.
Strategic shift
S&P Global concludes that strategic stockpiling alone will not solve the structural vulnerabilities facing global mineral supply chains.
“Project Vault represents both an ambitious policy experiment and a reflection of the current state of global mineral supply chains,” the report states.
Its long-term success, according to the report, will depend on whether the US can expand mining, refining and recycling capacity “across the economies of strategic allies.”
For Latin America’s mining industry, that could signal a new phase in which access to capital, processing technology and geopolitical alignment become as important as resource size itself.
(The original version of this content was written in English)
Originally published in BNamericas: Project Vault puts Latin America’s critical minerals sector under renewed US spotlight