Donald Trump has announced the creation of a critical mineral reserve worth nearly $12bn, a stockpile that could counter China’s ability to use its dominance of the hard-to-process metals as leverage in trade talks.

“Today we’re launching what will be known as Project Vault to ensure that American businesses and workers are never harmed by any shortage,” Trump said at the White House on Monday.

He compared it to the Strategic Petroleum Reserve (SPR), which was created in the 1970s when an Arab oil embargo led to a disruptive shortage of gas.

The US secretary of the interior, Doug Burgum, said 11 additional countries would be announced for the initiative later this week.

The project will initially be funded by a $10bn loan from the US Export-Import Bank and nearly $1.67bn in private capital. The minerals kept in the reserve would help to shield the manufacturers of vehicles, electronics and other goods from any supply chain disruption.

During trade talks last year spurred by Trump’s tariffs, China restricted the exporting of rare earths that were needed for jet engines, radar systems, electric vehicles, laptops and phones.

“We don’t want to ever go through what we went through a year ago,” Trump said in an apparent reference to the showdown with China, adding that, ultimately, “it did work out”. The president said he expected the government to make a profit from the loan being used to start the reserve.

China controls about 70% of the world’s rare earths mining and 90% of global rare earths processing. That gave it a chokehold on the sector that has caused the US to nurture alternative sources of the elements, creating a stockpile similar to the national reserve for petroleum.

The strategic reserve is expected to be the highlight of a ministerial meeting on critical minerals that the secretary of state, Marco Rubio, will host at the state department on Wednesday.

Vice-president JD Vance plans to deliver a keynote address at the meeting, which officials from several dozen European, African and Asian nations plan to attend. The meeting is also expected to include the signing of several bilateral agreements to improve and coordinate supply chain logistics.

The state department said in its statement announcing the meeting that the gathering “will create momentum for collaboration” among the participants to secure access to rare earths.

The government-backed loan funding the reserve would be for a period of 15 years. The US government has previously taken stakes in the rare earths miner MP Materials, as well as providing financial backing to the companies Vulcan Elements and USA Rare Earth.

Trump announced the reserve with General Motors CEO Mary Barra and mining industry billionaire Robert Friedland in the Oval Office, along with other members of his administration and congressional leaders.

With Associated Press and Reuters