US plans to build a $12bn critical minerals stockpile could push up prices and intensify competition for already scarce materials, the Financial Times reported.
The publication cited the Aerospace Industries Association (AIA), which warned that the government should “proceed with caution” on Project Vault, an Export-Import Bank initiative designed to create a strategic reserve of metals for civilian industries during shortages.
AIA members are concerned the programme could compete directly with companies for critical minerals at a time of constrained global supply, driving greater price volatility.
The warning comes as the US and other countries seek alternatives to Chinese supply following Beijing’s restrictions on exports of several metals critical to defence and advanced technologies.
The Ex-Im Bank rejected concerns that the scheme would distort the market, saying Project Vault was intended as a “shock absorber for American manufacturers” rather than a competitor for supply.
The AIA also warned that defence contractors would struggle to meet a January 1 deadline barring the sourcing of Chinese rare earth magnets for US military applications.
It said waivers would probably remain necessary because few manufacturers outside China can produce the specialised magnets at scale.
“It would be very difficult for the industry to bear not having any waivers at all, and I dare say it would be impossible,” AIA vice-president Dak Hardwick said.