Addressing Critical Mineral Dependency
The U.S. Department of Defense unveils plans to employ artificial intelligence (AI) for evaluating prices and predicting the supply of vital minerals, aiming to reduce dependency on foreign sources.
Enhancing U.S. Mineral Extraction
As part of broader initiatives to kickstart domestic critical mineral extraction, the Pentagon aims to develop a program that assesses and forecasts prices for crucial resources like nickel and cobalt. The move is crucial for weapon production and the ongoing energy transition.
Battling Market Disparities
The United States faces challenges in catching up with China, a market leader in mineral extraction. Attempts to establish new American mines often face setbacks due to fluctuations in commodity prices. The decision to improve forecasting systems is driven by a strategic move to mitigate the impact of these price fluctuations.
The OPEN Program: Revolutionizing Predictions
The Defense Advanced Research Projects Agency (DARPA) and the U.S. Geological Survey plan to collaborate with private contractors to develop the OPEN program (Open Price Exploration for National Security). This AI-driven model aims to enhance transparency by generating a "structural price" based on production locations, timing, labor costs, and other expenditures.
Forecasting Supply Impact
The AI program will not only provide a structural price but will also forecast potential market disruptions, such as labor strikes, to better predict their impact on the mineral supply chain.
Balancing Transparency and Market Dynamics
While the initiative aims to improve transparency, concerns arise regarding potential market disruptions. Critics fear that the Pentagon's efforts might create competing structures for price determination, challenging the traditional role of futures markets and pricing agencies. However, the Pentagon emphasizes transparency as its primary goal, asserting that it seeks to complement existing pricing mechanisms rather than replace them.
In conclusion, the Pentagon's AI initiative signals a significant step towards securing the U.S. mineral supply chain. By leveraging artificial intelligence for pricing assessments and supply predictions, the program aims to fortify the nation's strategic interests while navigating the complexities of the global mineral market.
Source: Reuters
https://www.zugtimes.com/pentagons-ai-program-will-forecasts-critical-mineral-prices/
