FORGE Alliance: America's Plurilateral Strategy to Break China's Rare Earth Grip

On February 4, 2026, the United States launched the Forum on Resource Geostrategic Engagement (FORGE) at the inaugural Critical Minerals Ministerial in Washington, D.C., uniting 54 nations and the European Commission in the most ambitious Western effort yet to counter China's near-total dominance of global rare earth processing. With over $30 billion in mobilized financing, coordinated price floors, and a new domestic strategic reserve called Project Vault, FORGE represents a paradigm shift in how allied nations approach critical mineral supply chain security.

What is FORGE and Why Was It Created?

FORGE is a permanent plurilateral framework that succeeds the Minerals Security Partnership (MSP), adding enforcement mechanisms and a preferential trade-and-investment zone for critical minerals. The initiative was announced by Secretary of State Marco Rubio alongside Vice President JD Vance, with representatives from 43 foreign ministers attending. The core problem FORGE addresses is stark: China controls approximately 90% of global rare earth processing and over 70% of cobalt refining, creating a strategic chokepoint for defense, AI hardware, electric vehicles, and renewable energy technologies.

China's 2025 export controls on seven medium and heavy rare earth elements—including dysprosium, terbium, samarium, and yttrium—triggered price spikes of up to sixfold. Dysprosium oxide surged from roughly $150/kg to over $900/kg, while neodymium-praseodymium (NdPr) prices rose 89% year-on-year. License approval rates for European firms fell below 25%, demonstrating Beijing's willingness to weaponize its processing monopoly. The China rare earth export controls have fundamentally altered the geopolitical calculus for Western governments.

Key Components of the FORGE Initiative

Coordinated Price Floors

A centerpiece of FORGE is the Critical Minerals Price Floor mechanism, announced by Vice President Vance. This system establishes government-set minimum prices for essential minerals to protect Western mining companies from Chinese predatory pricing and market flooding. Targeted reference prices include cobalt at $25.20/lb, lithium at $15,200/tonne, copper at $5.10/lb, and neodymium at $95,000/tonne. The price floors are maintained through adjustable tariffs within the FORGE preferential trade zone, creating a protected market for allied producers. Analysts note this approach may face World Trade Organization challenges, as coordinated price floors could be interpreted as market-distorting subsidies.

Project Vault: The $10 Billion Strategic Reserve

The U.S. Export-Import Bank approved a Direct Loan of up to $10 billion for Project Vault—more than double the largest financing in EXIM's history—to establish a U.S. Strategic Critical Minerals Reserve. Complemented by nearly $2 billion in private capital from partners including Boeing, GE Vernova, Clarios, and General Motors, Project Vault is a physical stockpile designed to shield domestic manufacturers from supply shocks. Companies commit to purchasing minerals at fixed rates and pay upfront costs for storage and loan interest; they can draw from the stockpile as needed but must replenish at the same fixed rates. The initiative addresses what analysts call the "NATO stockpile gap," where current reserves cover only 6-9 months of high-intensity conflict needs.

Bilateral Framework Agreements

At the ministerial, the U.S. signed 11 new bilateral critical minerals framework agreements or Memoranda of Understanding with Argentina, the Cook Islands, Ecuador, Guinea, Morocco, Paraguay, Peru, the Philippines, the United Arab Emirates, the United Kingdom, and Uzbekistan. This brought the total number of such deals to 21 in just five months, reflecting an aggressive diplomatic push to secure upstream supply. The U.S. critical minerals bilateral agreements are designed to create a diversified network of extraction and processing partnerships outside Chinese control.

The Role of Pax Silica and Complementary Initiatives

FORGE operates alongside Pax Silica, the State Department's flagship initiative on AI and supply chain security launched in December 2025. Pax Silica has attracted 24 signatory countries including Australia, Japan, South Korea, India, and the European Union, with a $250 million investment consortium to strengthen energy and critical mineral supply chains. A pilot AI Assistance Project in Panama will create a supply chain credentialing platform for semiconductors and critical minerals, linking the digital and physical layers of supply chain security. The Pax Silica initiative supply chain security provides a technology-focused complement to FORGE's mineral-specific framework.

Can Diversification Succeed Before 2040?

Despite the scale of FORGE, the road to supply chain independence is long. A Morgan Stanley BluePaper from November 2025 warns that Western diversification efforts are severely hindered by 17.8-year average mine development timelines. China's entrenched position—controlling 88% of refined rare earth supply and 65% of mined supply—means that demand from humanoid robots and EVs could create structural deficits of 13-26% for NdPr and up to 78% for lithium by 2040-2050. Each humanoid robot requires 0.9kg of NdPr magnets, potentially increasing global demand by 167% by 2050.

The International Energy Agency estimates that $6.5 trillion in global economic activity is at risk from supply disruptions. Rebuilding independent Western processing capacity could take 20-30 years and cost $15-25 billion, according to industry analysts. Meaningful non-Chinese processing capacity is not expected before 2028-2030, well beyond the critical 12-18 month window for near-term relief identified by multiple studies.

China's 15th Five-Year Plan (2026-2030) prioritizes energy and resource security, suggesting Beijing will continue to leverage its processing dominance. The critical minerals supply chain diversification challenges are compounded by China's ability to use temporary, reversible export restrictions to maintain pricing power and extract strategic concessions while discouraging large-scale Western alternative investment.

Expert Perspectives

"FORGE is the most serious attempt yet to create a parallel critical minerals ecosystem, but the timelines are daunting. We are asking industry to build 20-year infrastructure in a 2-year geopolitical window," said a senior fellow at the Atlantic Council's Global Energy Center. "The price floor mechanism is innovative but risks triggering WTO disputes and could raise costs for downstream manufacturers."

Industry leaders have welcomed the coordinated approach. A spokesperson for the Critical Minerals Association noted: "Project Vault's offtake agreements provide the price certainty that miners have been lacking. For the first time, we have a government-backed buyer of last resort."

Frequently Asked Questions

What is FORGE in critical minerals?

FORGE (Forum on Resource Geostrategic Engagement) is a U.S.-led plurilateral framework launched in February 2026 that unites 54 nations to coordinate critical minerals policy, establish price floors, and mobilize over $30 billion for diversified supply chains. It succeeds the Minerals Security Partnership.

How does Project Vault work?

Project Vault is a $10 billion EXIM-backed public-private partnership that creates a U.S. Strategic Critical Minerals Reserve. Companies purchase minerals at fixed rates, pay storage costs, and can draw from the stockpile during disruptions, replenishing at the same fixed prices.

What minerals does China control?

China controls approximately 90% of global rare earth processing, 80% of tungsten processing, 60% of antimony, and over 70% of cobalt refining. It also dominates processing of dysprosium, terbium, neodymium, and praseodymium used in permanent magnets.

Can FORGE break China's monopoly?

Analysts estimate full supply chain independence remains 5-7 years away, requiring $60 billion in investment. Meaningful non-Chinese processing capacity is not expected before 2028-2030, and rebuilding independent supply chains could take 20-30 years.

What is the Critical Minerals Price Floor?

Announced by Vice President Vance, the price floor mechanism sets government-enforced minimum prices for critical minerals like cobalt ($25.20/lb), lithium ($15,200/tonne), and neodymium ($95,000/tonne) to protect allied producers from Chinese predatory pricing.

Conclusion: A Race Against Time

FORGE represents a historic mobilization of diplomatic and financial capital to address the critical minerals vulnerability at the heart of Western economic and national security. The initiative's coordinated price floors, bilateral agreements, and strategic reserve provide a comprehensive toolkit for supply chain diversification. However, the fundamental challenge remains time: China's 90% processing share, built over decades, cannot be replicated in years. The 12-18 month window for decisive action identified by multiple studies is narrowing, and the success of FORGE will ultimately depend on whether its member nations can translate political commitments into physical processing capacity before the next supply crisis hits.

Sources

• U.S. Department of State - 2026 Critical Minerals Ministerial
• U.S. Department of State - FORGE Chairmanship
• Bipartisan Policy Center - Project Vault and FORGE
• Rare Earth Exchanges - Morgan Stanley BluePaper
• Rare Earth Exchanges - China's 2026 Export Controls
• Mining Technology - China Rare Earth Dominance