Trump Administration Plans AI System to Set Critical Mineral Prices

The Trump administration intends to utilize a Pentagon-developed artificial intelligence system to establish pricing standards for essential minerals within a proposed international trading alliance. Vice President JD Vance has suggested creating standardized pricing for critical minerals backed by adjustable tariffs across more than 50 nations.

The Trump administration is preparing to deploy a Pentagon-developed artificial intelligence system to establish pricing benchmarks for essential minerals as part of efforts to create an international metals trading alliance, according to three sources familiar with the initiative.

Vice President JD Vance outlined plans earlier this month for the United States and over 50 partner nations to implement “standardized pricing for critical minerals throughout each production phase” supported by “flexible tariffs to maintain pricing stability.”

These pricing benchmarks will be determined using the Department of Defense’s Open Price Exploration for National Security (OPEN) artificial intelligence metals program, the sources revealed, speaking on condition of anonymity.

This development reveals the administration’s strategy for influencing market pricing mechanisms, despite ongoing questions about whether AI technology can successfully transform how essential minerals are purchased and sold.

DARPA, the Pentagon’s Defense Advanced Research Projects Agency, initiated the OPEN program in 2023 with the objective of determining appropriate metal pricing by incorporating labor, processing, and additional costs while removing the effects of suspected Chinese market manipulation.

Administration officials are initially applying OPEN’s AI pricing framework to a minimum of four essential minerals – germanium, gallium, antimony, and tungsten – before expanding to additional materials. S&P Global and Finnish data company Rovjok are providing data and technical support, sources indicated.

The White House, Department of Defense, S&P Global, and Rovjok did not provide responses to comment requests.

This minerals strategy emerges as the administration accelerates AI implementation across various sectors, including partnerships with OpenAI, Anthropic, and Google’s parent company Alphabet for military AI applications.

China dominates global mining and processing operations for numerous minerals deemed critical by U.S. officials. Beijing has leveraged this position recently to manufacture minerals at a financial loss and suppress market prices, forcing Western competitors to shut down operations.

Chinese representatives have consistently stated that Beijing manages mineral exports according to World Trade Organization guidelines.

The OPEN program, scheduled for transfer to the nonprofit Critical Minerals Forum (CMF) next year, has concentrated on metals with limited trading activity or no established markets.

The CMF stated its efforts focus on collaborating with “government-funded partners to conduct stress-testing with AI models” and “identifying and supporting commercially viable mining and processing projects, rather than on government policy.”

The AI framework aims to facilitate supply agreements between Western mining companies and manufacturers by providing enhanced pricing predictability for both parties.

Manufacturers utilizing germanium, antimony, gallium, and similar minerals often struggle to determine whether Chinese pricing reflects genuine supply-and-demand conditions.

An antimony price established through the AI system and supported by the trading alliance could increase profitability for companies developing U.S. antimony operations. However, it might raise costs for automotive manufacturers who incorporate antimony in adhesives and other components.

Details remain unclear regarding whether AI-generated prices would fluctuate or remain fixed, and whether pricing would be negotiated bilaterally between the U.S. and individual allies or applied uniformly across the trading bloc.

Implementation timing is uncertain as the Trump administration must first persuade dozens of allied nations to join the alliance to ensure its effectiveness.

Canada’s Ministry of Energy and Natural Resources told Reuters it is “working to comprehensively understand and analyze” the minerals trading bloc proposal.

This initiative comes as the Trump administration moves away from providing individual company price guarantees due to insufficient congressional funding, despite widespread industry requests for such assistance.

“The administration is still, in good faith, trying to respond to industry demand signals by creating an architecture of reliable investment, but it doesn’t have the one tool that everybody kind of wanted them to use,” explained Eric Robinson, special counsel at Baker Botts law firm and former managing director of the Pentagon’s Office of Strategic Capital.

The proposal to establish mineral reference pricing supported by tariffs has raised questions about whether tariffs would apply to all products containing critical minerals.

For instance, the U.S. maintains minimal cathode production capacity and currently has limited lithium requirements, yet laptops containing lithium-ion batteries are regularly imported from Taiwan and other locations. Manufacturers have traditionally preferred the most cost-effective mineral sources available.

“You can try to set something approximating a price floor, but ultimately the trade barriers aren’t going to guarantee someone on the other side of that tariff wall an actual price floor because multiple producers are still going to compete on price,” said Nathaniel Horadam, former U.S. Department of Energy official who oversaw critical minerals lending programs during both the Biden and Trump administrations.

The OPEN program coincides with private sector transparency initiatives. CME Group plans to introduce the world’s first rare earths futures contract, as Reuters reported earlier this month.

U.S. mining companies express support for a reference price-and-tariff system that could help counter Chinese dumping practices, provided it enables profitable operations.

“I have a good steer on what the price is to produce tungsten in the U.S.,” stated Oliver Friesen, CEO of Guardian Metal Resources, which is developing two Nevada mines for the steel-hardening metal. “I would want to make sure any reference price is above that.”

Trump has directed the Department of Defense to rebrand itself as the Department of War, a modification requiring Congressional approval.