U.S. President Donald Trump recently launched “Project Vault,” a $12 billion strategic stockpile of critical and rare earth minerals aimed at insulating U.S. manufacturers from supply shocks. The reserve will source and store key inputs, such as rare earths, lithium, cobalt, copper and uranium.
The plan, announced from the Oval Office, brings together $2 billion in private capital and a $10 billion loan from the U.S. Export-Import Bank.
Rare earth miners and critical materials stocks such as MP Materials (MP), along with clean energy names like Bloom Energy BE, which rely on metals central to the global energy transition, jumped on the news, underscoring how policies that bolster the domestic supply chain can lift market confidence.
For investors, this policy adoption highlights a significant entry opportunity in exchange-traded funds (ETFs) that hold upstream producers and developers, such as VanEck Rare Earth & Strategic Metals ETF (REMX) as well as clean energy ETFs like iShares Global Clean Energy ETF (ICLN), with critical minerals serving as the “bloodstream” for renewable hardware.
Before getting into the specifics of these ETFs, let us take a closer look at what drove the push for this strategic stockpile and how it benefits the ETFs mentioned above.
While President Trump is known for favoring traditional energy policies, Project Vault is not primarily a clean energy initiative; its core drivers are national economic security and geopolitical strategy.
Apart from the clean energy industry, rare earth minerals also serve as a critical raw material for industries like defense, space and automotive. These elements are primarily used to create high-performance magnets, advanced electronics, and specialized alloys that enable modern technology, such as the F-35 fighter jet, electric vehicles (EVs) and satellites.
Thus, by framing critical minerals as an industrial necessity rather than a climate-only initiative, the administration aims to boost the future of American manufacturing.
This latest stance by the U.S. administration is a direct response to China’s dominance, which controls about 60-70% of global rare earth mining and more than 90% of processing. A previous episode where China restricted exports during trade talks highlighted America’s vulnerability.
To this end, it is imperative to mention that Trump has explicitly compared the stockpile to the petroleum reserve, framing it as a necessary safeguard for American industry against foreign leverage, ensuring businesses are “never harmed by any shortage.”
While the policy is rooted in security, the direct beneficiaries are battery manufacturing and clean energy companies. Rare earths like neodymium and dysprosium are essential for the permanent magnets found in EV motors and wind turbines.
Industry experts note that the critical next step will be transforming these raw materials into advanced components within the United States, fostering a resilient domestic manufacturing base for future technologies, ranging from EVs to humanoid robots. This creates a foundational material base that can accelerate the entire clean tech ecosystem, from miners like MP to wind turbine manufacturers like Iberdrola IBDRY, on the path of a multi-year growth cycle.
For investors, Project Vault creates a compelling opportunity to gain exposure through the following ETFs:
VanEck Rare Earth & Strategic Metals ETF REMX
This fund, with net assets worth $2.56 billion, offers exposure to 32 companies involved in producing, refining, and recycling of rare earth and strategic metals and minerals. Its top five holdings include Albemarle Corp. ALB (8.30%), China Northern Rare Earth Group (7.02%), Lynus Rare Earth (6.68%), Xiamen Tungsten (6.24%) and MP (5.98%).
REMX has surged 118.8% over the past year. The fund charges 58 basis points (bps) as fees.
Global X Lithium & Battery Tech ETF LIT
This fund, with net assets worth $1.73 billion, offers exposure to 41 companies throughout the lithium cycle, including mining, refinement and battery production, cutting across traditional sector and geographic definitions. Its top five holdings include Rio Tinto RIO (22.50%), ALB (7.17%), Samsung SDI (4.57%), Sociedad Quimica y Minera SQM (4.05%) and Naura Technology Group (3.86%).
LIT has surged 76.4% over the past year. The fund charges 75 bps as fees.
Sprott Critical Materials ETF SETM
This fund, with net assets worth $509.6 million, offers exposure to 128 global securities in the critical materials industry. Its top five holdings include FreeportMcMoRan FCX (5.28%), NAC Kazatomprom (5.20%), Cameco Corp. CCJ (5.00%), ALB (4.61%) and Uranium Energy UEC (4.17%).
SETM has rallied 134.8% over the past year. The fund charges 65 bps as fees.
iShares Global Clean Energy ETF ICLN
This fund, with net assets worth $2.14 billion, offers exposure to 102 companies that produce energy from solar, wind, and other renewable sources. Its top five holdings include BE (11.28%), Nextpower NXT (9.73%), First Solar FSLR (7.15%), IBDRY (5.38%) and China Yangtze Power (4.34%).
ICLN has gained 65% over the past year. The fund charges 39 bps as fees.
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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
First Solar, Inc. (FSLR) : Free Stock Analysis Report
Rio Tinto PLC (RIO) : Free Stock Analysis Report
Albemarle Corporation (ALB) : Free Stock Analysis Report
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
Cameco Corporation (CCJ) : Free Stock Analysis Report
Uranium Energy Corp. (UEC) : Free Stock Analysis Report
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
Global X Lithium & Battery Tech ETF (LIT): ETF Research Reports
VanEck Rare Earth/Strategic Me (REMX): ETF Research Reports
Iberdrola S.A. (IBDRY) : Free Stock Analysis Report
Bloom Energy Corporation (BE) : Free Stock Analysis Report
Nextracker Inc. (NXT) : Free Stock Analysis Report
Sprott Critical Materials ETF (SETM): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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