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In February 2026, the United States launched the Forum on Resource Geostrategic Engagement (FORGE), a 54-nation coalition designed to build an allied-controlled critical minerals supply chain and counter China's near-total dominance of rare earth processing. Backed by the $12 billion Project Vault strategic reserve, the initiative introduces coordinated price floors and preferential trade arrangements to shield Western miners from Chinese price dumping. With China controlling roughly 90% of global rare earth processing and tightening export controls on neodymium, dysprosium, and terbium, the stakes for energy transition costs, defense supply chains, and the broader US–China technology rivalry have never been higher.
What Is FORGE and Project Vault?
FORGE (Forum on Resource Geostrategic Engagement) is a plurilateral coalition announced at the inaugural Critical Minerals Ministerial in Washington, D.C., on February 4, 2026. Hosted by Secretary of State Marco Rubio and Vice President JD Vance, the ministerial brought together representatives from 54 nations and the European Commission. FORGE succeeds the Biden-era Minerals Security Partnership but with stronger enforcement mechanisms, including coordinated price floors and adjustable tariffs to create a preferential trade-and-investment zone for critical minerals.
Project Vault, announced by President Donald Trump on February 2, 2026, is a $12 billion public-private partnership that establishes the U.S. Strategic Critical Minerals Reserve. Led by the Export-Import Bank of the United States (EXIM), the initiative combines a record $10 billion EXIM loan with nearly $2 billion in private-sector investment from partners including Boeing, GE Vernova, Mercuria Energy Americas, Traxys, Hartree, Clarios, and General Motors. The reserve will store essential raw materials in secure facilities across the United States to protect domestic manufacturers from supply shocks.
The critical minerals supply chain crisis has been building for years. China controls approximately 90% of global rare earth processing, 80% of tungsten, and 60% of antimony. In April 2025, Beijing imposed export controls on seven heavy and medium-heavy rare earths under MOFCOM Announcement No. 18, requiring export licenses for materials containing dysprosium or terbium. A further expansion in October 2025 added five more rare earth elements and introduced extraterritorial provisions—though these were suspended for one year in November 2025 as part of a US-China trade agreement. The underlying April 2025 controls remain in force, meaning any NdFeB magnet containing dysprosium or terbium still requires a MOFCOM export license, with processing times stretching 10 to 16 weeks.
How the Price Floor Mechanism Works
A centerpiece of FORGE is the Critical Minerals Price Floor, announced by Vice President Vance at the ministerial. The mechanism sets minimum reference prices for key minerals: cobalt at $25.20 per pound, lithium at $15,200 per tonne, copper at $5.10 per pound, and neodymium at $95,000 per tonne. If global market prices fall below these floors, adjustable tariffs are applied to imports from outside the FORGE preferential trade zone, which now includes over 30 nations. The goal is to protect allied producers from Chinese price dumping—a tactic Beijing has used to drive competitors out of business and consolidate its market dominance.
The price floor addresses a structural paradox in the critical minerals market. Long-term demand for critical minerals is projected to quadruple by 2050, driven by the energy transition and defense needs. Yet short-term commodity prices have collapsed: lithium is down over 80% from its 2022 peak, and cobalt prices have fallen sharply. This creates a disincentive for new mining and processing investments precisely when they are most needed. The energy transition costs and mineral pricing dilemma has become a central challenge for policymakers worldwide.
Mobilizing $30 Billion in Investments
The Trump administration has mobilized over $30 billion in letters of interest, investments, and loans for critical mineral projects. Beyond Project Vault's $12 billion, the EXIM Bank has signed 21 bilateral framework agreements in five months with countries including Argentina, Morocco, Peru, the Philippines, the United Arab Emirates, the United Kingdom, and the Democratic Republic of the Congo. South Korea will serve as FORGE's inaugural chair through June 2026.
On April 27, 2026, the United States and European Union released a joint Critical Minerals Action Plan, aiming to coordinate trade policies and develop a plurilateral trade initiative with like-minded partners. The plan seeks to align standards, promote sustainable sourcing, and reduce dependency on single sources of supply. According to a Reuters report, the action plan is a step toward a binding agreement on critical minerals trade between the two economies.
Challenges and Analyst Warnings
Despite the ambitious framework, analysts warn that building independent Western processing capacity may take 20 to 30 years. The Atlantic Council notes that while the U.S. government has tools like the Defense Production Act and stockpiles to manage short-term crises, its ability to sustain resilience during protracted disruptions remains dangerously underdeveloped. Scaling alternative production would take years, leaving the U.S. exposed to prolonged supply shocks.
A report from the Japan Research Institute highlights that the Trump administration's approach prioritizes military applications—rare earths for magnets used in defense systems—over lithium and nickel needed for electric vehicles and batteries. This partial restructuring risks leaving dependence on China unresolved in the clean energy sector.
The US-China technology rivalry and mineral security is intensifying. Neodymium-praseodymium (NdPr) prices jumped 37% in April 2026 to approximately $126 per kilogram, roughly 2.4 times January levels, as markets reacted to the tightening supply environment. China's export licensing process, which takes 10 weeks at best and up to 16 weeks with documentation gaps, creates additional uncertainty for manufacturers.
Expert Perspectives
"FORGE represents a fundamental shift from bilateralism to plurilateralism in critical minerals policy," said a senior fellow at the Atlantic Council. "The question is whether translating 21 framework agreements into actual mines and processing facilities can happen fast enough to meet the 12- to 18-month window of opportunity before China's position becomes unassailable."
EXIM Chairman Jovanovic, speaking at the Center for Strategic and International Studies, called Project Vault "the most significant industrial policy initiative since the Manhattan Project," emphasizing that the reserve will ensure American businesses are never harmed by critical mineral shortages.
Frequently Asked Questions
What is FORGE?
FORGE (Forum on Resource Geostrategic Engagement) is a 54-nation coalition launched by the United States in February 2026 to build an allied-controlled critical minerals supply chain and counter China's dominance in rare earth processing.
What is Project Vault?
Project Vault is a $12 billion public-private partnership that establishes the U.S. Strategic Critical Minerals Reserve, combining a $10 billion EXIM Bank loan with $2 billion in private investment to stockpile essential raw materials.
How does the critical minerals price floor work?
The price floor sets minimum reference prices for minerals like lithium, cobalt, copper, and neodymium. If global prices fall below these levels, adjustable tariffs protect allied producers within the FORGE preferential trade zone.
Why is China's control of rare earths a problem?
China controls roughly 90% of global rare earth processing and has imposed export controls on key elements like neodymium, dysprosium, and terbium, which are essential for defense systems, electric vehicles, and renewable energy technologies.
How long will it take to build independent Western supply chains?
Analysts estimate that building meaningful alternative processing capacity could take 20 to 30 years, though some projections suggest 5 to 7 years for initial capacity. The window for decisive action may be as narrow as 12 to 18 months.
Outlook and Implications
The FORGE initiative and Project Vault represent the most ambitious U.S. effort to date to break China's grip on critical minerals. With $30 billion mobilized and a 54-nation coalition in place, the framework for an allied-controlled supply chain now exists. However, the gap between policy ambition and industrial reality remains vast. The global trade and energy security implications will unfold over the coming decades, as the world watches whether the West can translate diplomatic agreements into physical processing capacity before China's dominance becomes irreversible.
Sources
- U.S. Department of State - 2026 Critical Minerals Ministerial
- EXIM Bank - Project Vault Announcement
- Atlantic Council - US Critical Minerals Policy Goes Collaborative with FORGE
- Reuters - US, EU announce action plan on critical minerals
- China Briefing - China's Rare Earth Export Controls
- CFO Times - Critical Minerals Price Floor Announcement
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