blocks of semiconductors, computer servers, military equipment and myriad other products. Artificially low prices for cobalt, lithium, nickel and other minerals have made it harder for Western mining rivals to compete, inhibiting new development and driving some companies out of business – a tactic Beijing has used repeatedly in other industries. The trade bloc, as envisioned, would explore price supports, market standards, subsidies, or guaranteed purchases to encourage and financially underpin production across multiple countries. The measures could be enforced by “adjustable tariffs to uphold pricing integrity,” Vance said at the time. At present, many niche minerals critical to tech and defense are traded over the counter with minimal transparency and linked to Chinese prices, which de facto set the global market due to China’s dominant production. Since Vance’s announcement, G7 members have pushed back against US Trade Representative Jamieson Greer in private negotiations and cooled on the idea of the bloc relying on a price scheme derived from a Pentagon AI model, three sources told Reuters. Key concerns centre on who would pay a premium for minerals, how far down the supply chain those subsidies should reach, and how governance would work, according to European officials. The US mining industry is divided on what steps Greer should push allies to support, a disagreement that is clear from more than 230 public submissions sent to Greer’s office by a range of miners, refiners and their customers reviewed by Reuters. Allied and corporate concerns underscore the complexity of reinventing the way minerals are bought and sold. Yet how and whether the trade bloc ultimately takes shape could influence minerals markets for years to come, more than a dozen analysts and consultants told Reuters. “It is a very hard thing to do, and I’m happy I’m not the one doing it,” said Ashley Zumwalt-Forbes, a minerals investor who ran the US Department of Energy’s batteries and critical minerals portfolio under former President Joe Biden. The topic will be a key talking point as G7 members meet this week in France. Western countries face the difficult task of building up a supply chain from mine to end product all at once to diversify away from China. The draft US proposal, crafted using an AI pricing program created by the Pentagon’s Defense Advanced Research Projects Agency (DARPA), has been delivered to the White House and the National Security Council and US representatives are expected to brief G7 allies on its contents in the upcoming meeting, according to a US official. European and industry officials said they want to study the impact of price supports on the medium and long term rather than commit to quick deals – at odds with the faster-paced Americans. The Trump administration, meanwhile, is reluctant to embrace France’s idea of a permanent administrative secretariat within the International Energy Agency (IEA) or the OECD to track G7 initiatives on critical minerals as presidencies rotate, the sources added. Adding to the complications, Canada and France, which hold the G7 presidency, want to develop a trading bloc led by the G7, whereas the United States wants to avoid multilateral negotiations and forge fast, concrete bilateral deals that it can later expand, three sources familiar with the matter said. The push for a bilateral approach from Washington appears to signal a shift from the plan first outlined by Vance earlier this year. “What we’re trying to do is take some of these approaches and turn them into an agreement,” Greer told reporters in early June at the Organisation for Economic Co-operation and Development (OECD) ministerial meeting in Paris. The United States, Greer said, would use price supports “to protect production of critical minerals and derivative products. … We want to phase it in. … If other countries want to join us in that, they’re welcome to do that.” Washington aims to present a proposal for binding bilateral agreements to Japan and the European Union before the end of June, two sources familiar with the matter said. The proposal would be the first concrete step built on action plans announced earlier this year, one with Japan and the other with the EU. The first binding agreement could extend to five to 10 minerals, the sources said. The minerals under consideration include heavy rare earths, antimony, graphite and tungsten, all subject to Chinese export bans or restrictions. Price setting The Trump administration aims to set prices using the US Department of Defense’s Open Price Exploration for National Security (OPEN) AI metals program, which was created by DARPA and aims to calculate what a metal should be priced at when labor, processing and other costs are factored in, while alleged Chinese market manipulation is factored out. But European allies so far are opposed to the idea of using an AI pricing system developed by Washington, one source said, citing concerns about the US having too much sway over the bloc’s pricing. Another person added that Europeans want a broad set of tools and “agile governance” around how best to deploy these measures for any given mineral and its value chain. “For Europe, it would be better to have a price index based on real deals in the European market. The question is whether we can make these opaque pricing mechanisms more transparent, more market-driven, and less prone to manipulation,” Nicola Beer, who oversees minerals financing at the EU-controlled European Investment Bank, told Reuters. “Different parts of supply chains and products across sectors are shaped by very different pricing mechanisms, which adds to the complexity.” As a possible alternative to OPEN, an EU-funded agency called EIT RawMaterials is working with the digital platform Metalshub to create indexes that are not based on Chinese government-led pricing, giving foreign investors clearer signals on profitability. The indexes could be broader than Europe and include the United States, Australia, Canada or Britain. Enforcement on any trading bloc could be complicated by the fact that many Western nations import very few minerals in their raw or lightly processed form. Lithium carbonate, for example, is not routinely imported to the US, though cell phones made from it are. “There’s a very mixed message coming out of the US right now on battery metals,” said James Willoughby, a metals analyst at the WoodMac consultancy. Corporate disagreement In a statement, Greer told Reuters he was using the submissions sent by miners and their clients to “help guide policy for continued negotiations” with Washington’s allies. The submissions show respondents broadly agree that the bloc should focus on niche minerals rather than copper or other widely traded metals and that it should also focus on downstream products, including cell phones and laptops. Yet they disagree on how mineral prices should be regulated, with several prominent companies and mining trade groups recommending against price-setting. “There’s nervousness from all sides about what to do and how different actions could affect different parts of the supply chain,” said Blake Harden, a managing director focused on trade policy at the EY consultancy. Divergent proposals came from General Motors, which is building North America’s largest lithium mine with Lithium Americas, recycler Umicore, platinum miner Sibanye Stillwater, the US Chamber of Commerce, and rare earths company MP Materials, which last July became the only company to receive a financial backstop for its rare earths, in which Washington funds the company if prices fall below a certain level. Lynas Rare Earths and Serra Verde have received off-takes for part of their rare earths production from the US government at a set price, although they did not receive the financial backstop. The National Mining Association, the US industry trade group, advised Greer to steer away from too much price-fixing and instead focus on tax credits and other incentives. “While market interventions such as pricing mechanisms may play a role in certain circumstances, incentive-based approaches … are better suited to addressing challenges facing the domestic mining industry,” said Rich Nolan, the trade group’s CEO. Reporting by Julia Payne in Évians-les-Bains and Ernest Scheyder in Houston. Additional reporting by Leigh Thomas in Paris and David Lawder and Jarrett Renshaw in Washington. Editing by Veronica Brown and Claudia Parsons. All courtesy of Reuters.