US Department of Defense OPEN Program: Revolutionizing Critical Minerals Market Transparency with AI
In a strategic move to enhance market transparency, the US Department of Defense is unveiling the Open Price Exploration for National Security (OPEN) program. Aimed at estimating prices and predicting supplies of critical minerals such as nickel and cobalt, this initiative introduces a new variable into global metals markets.
As part of broader efforts to bolster US production of essential minerals for weapons manufacturing and the energy transition, the OPEN program seeks to counter the influence of commodity price swings, contributing to the lag in US output compared to market leader China.
DARPA and US Geological Survey Leading the Charge
Headed by DARPA and the US Geological Survey, the program involves hiring private contractors to develop an AI-backed model for determining a metal’s “structural price.” This innovative approach considers various factors, including production location, timing, labor, and supply costs, aiming to provide enhanced price transparency for both government agencies and commercial entities.
Beyond estimating prices, the OPEN program has a forward-looking aspect, aiming to predict supply disruptions caused by unexpected market shocks like labor strikes. However, it refrains from predicting specific natural disasters or market events, focusing on enhancing preparedness for potential disruptions.
Anticipated to roll out in three phases over two years, the AI model developed through OPEN could provide a formula for effectively timing purchases of national stockpiles. This strategic approach aims to navigate market fluctuations, offering the Pentagon an advantageous position in procuring critical materials.
While the program is not intended to replace existing futures markets, concerns have been raised about potential confusion in determining metal prices with dueling structures. S&P Global and Lockheed Martin are among the companies applying for involvement in the project, reflecting the industry’s interest in this groundbreaking initiative.
Emphasizing a mission to revolutionize the construction and dissemination of price, supply, and demand predictions, the OPEN program could provide invaluable insights into critical materials markets. This, in turn, may contribute to national security efforts by offering enhanced transparency in the complex world of metals trading.
Read More AI – Tech Foom
