Author: Amber Chen*
China’s recent intensification of its rare earth restrictions on Japan this month highlights the potential geostrategic vulnerabilities present. Critical minerals play a central role in economic security, industrial competitiveness, and geopolitical resilience. From electric vehicles to renewable energy systems, semiconductors to advanced defence platforms, materials such as lithium, nickel, cobalt, and rare earth elements are indispensable. With the global race for critical minerals intensifying, Southeast Asia stands at a crossroads. As demand for lithium, nickel, cobalt, and rare earth elements expands in response to the global energy transition, ASEAN has an opportunity to position itself as a reliable, rules-based supplier of critical minerals. Doing so, however, will require deeper and more strategic engagement with trusted partners, particularly Australia
Critical minerals now sit at the heart of economic security, industrial competitiveness, and geopolitical resilience. They are essential inputs for electric vehicles, renewable energy systems, semiconductors, and advanced defence technologies. Yet global supply chains for these minerals remain highly concentrated, exposing countries to price volatility, supply disruptions, and geopolitical pressure. China’s dominance of critical mineral refining and processing illustrates this vulnerability. While China does not always lead in mining production, it controls a significant share of downstream processing capacity, particularly for rare earth elements, graphite, and battery-grade chemicals. The Global Critical Minerals Outlook 2025 showed that China was the leading refiner with an average market share of 70% for 19 out of 20 important strategic minerals, and this has only intensified in recent years
For ASEAN, this concentration poses both a risk and a strategic opening. On the one hand, over-reliance on a single dominant player undermines supply chain resilience and exposes ASEAN economies to external shocks. On the other hand, ASEAN’s growing role in critical mineral extraction positions the region as a potential stabilising force in global markets, that is, if it can credibly demonstrate reliability, sustainability, and policy coherence. ASEAN also leads global production for nickel (63%) and tin (42%), with Indonesia alone having expanded output to 2.2 million tonnes per year, making it the world’s largest nickel producer. The Philippines is also a significant contributor, supplying nickel and related materials that are crucial for battery manufacturing. Beyond nickel, ASEAN countries hold meaningful reserves of tin, bauxite, and, increasingly, rare earth elements.
However, rapid expansion has not been without cost. In several ASEAN countries, weak regulatory enforcement has allowed unregulated mining and environmental degradation to occur, undermining local communities and eroding investor confidence. As global buyers increasingly demand minerals that meet environmental, social, and governance (ESG) standards, ASEAN’s long-term competitiveness will depend not just on volume, but on credibility.
This is where Australia becomes a natural partner. Australia is endowed with some of the world’s largest critical mineral reserves, with Geoscience Australia finding that the country ranks in the top five producers of 14 minerals and metals, seven of which are classified as critical and two as strategic. However, Australia faces its own structural constraint. Despite its resource wealth, much of Australia’s critical mineral output is exported as raw or minimally processed material. Downstream processing, such as refining ore into battery-grade chemicals or advanced components, is still largely conducted overseas. While the Australian government’s Future Made in Australia initiative aims to expand domestic processing capacity and mitigate global supply chain risks, these efforts are still in their early stages. This shared challenge of abundant resources but limited downstream integration creates a compelling case for ASEAN–Australia collaboration.
Together, ASEAN and Australia could build more resilient, diversified, and sustainable critical mineral supply chains that reduce reliance on single-country dominance. ASEAN’s expanding extraction and refining base and Australia’s capital, technical expertise, and regulatory experience are highly complementary. Rather than competing for investment or resorting to unilateral export controls, both sides stand to gain from coordinated value-chain development.
Yet to date, critical minerals cooperation between ASEAN and Australia has been surprisingly limited. Australia has prioritised partnerships with the United States, Japan, the European Union, India, and Canada through bilateral agreements and multilateral frameworks such as the United States–Australia Framework for Securing Supply in the Mining and Processing of Critical Minerals and Rare Earths. Australia has often overlooked ASEAN as a critical minerals partner. With the International Energy Agency projecting that demand for lithium, graphite, and nickel could increase several-fold by 2040 as electric vehicles and renewable energy technologies scale globally, and the concentration of refining capacity heightens the risk of bottlenecks, trade disruptions, and geopolitical coercion, it is essential for greater engagement between ASEAN and Australia in the critical minerals space.
A more strategic partnership should begin with three priorities:
First, ASEAN and Australia should establish a formal critical minerals cooperation mechanism embedded within existing economic and strategic frameworks. This would provide a platform for policy coordination, data sharing, and investment alignment, while signalling long-term commitment to global markets.
Second, both sides should jointly invest in downstream processing and refining capacity. ASEAN countries such as Indonesia have already used export restrictions to encourage domestic value addition. Australia, through targeted tax incentives and industrial policy, is also seeking to move up the value chain. Coordinated investment, rather than fragmented national strategies, would reduce duplication, improve efficiency, and strengthen regional supply chains.
Third, cooperation must prioritise environmental governance, workforce development, and technology transfer. Australian expertise in environmental regulation, mine rehabilitation, and transparent governance could help ASEAN producers meet rising ESG expectations. In turn, ASEAN’s scale and proximity to manufacturing hubs could support Australia’s ambitions to participate more meaningfully in battery and clean-energy supply chains.
Crucially, this cooperation must be grounded in trust. For ASEAN countries, critical minerals are not merely commodities; they are strategic assets tied to development objectives, industrial policy, and national sovereignty. Australia, as a long-standing regional partner and middle power, is well placed to engage on these terms, but only if it listens as much as it leads.
By deepening cooperation, both ASEAN and Australia can enhance economic resilience, support the global energy transition, and reinforce a stable, prosperous Indo-Pacific.
*Students Exchange in International Relations in Southeast Asia class; Professor: Ratih Indraswari, Ph.D.
Reference:
Australia and Canada Deepen Critical Minerals Collaboration (https://www.minister.industry.gov.au/ministers/king/media-releases/australia-and-canada-deepen -critical-minerals-collaboration)
Australian Government Response: Driving Advanced Manufacturing in Australia – Inquiry and Report (https://www.industry.gov.au/publications/australian-government-response-driving-advanced-m anufacturing-australia-inquiry-and-report)
Cooperate, Not Compete: ASEAN’s Critical Mineral Strategy for the Energy Transition (https://www.eria.org/news-and-views/cooperate–not-compete–asean-s-critical-mineral-strategy -for-energy-transition)
Global Critical Minerals Outlook 2025 (https://www.iea.org/reports/global-critical-minerals-outlook-2025)
Navigating ASEAN’s critical materials future: Opportunities, risks and strategic imperatives (https://link.springer.com/article/10.1007/s13563-025-00553-3)
Nickel Production by Country (https://worldpopulationreview.com/country-rankings/nickel-production-by-country)
The Clean Energy Paradox: Can ASEAN Reconcile Nickel Mining with Biodiversity Protection? (https://accept.aseanenergy.org/the-clean-energy-paradox-can-asean-reconcile-nickel-mining-wit h-biodiversity-protection)
United States–Australia Framework for Securing Supply of Critical Minerals and Rare Earths (https://www.industry.gov.au/publications/united-states-australia-framework-securing-supply-mi ning-and-processing-critical-minerals-and-rare-earths)
World Rankings – Australia’s Identified Mineral Resources 2024 (https://www.ga.gov.au/aimr2024/world-rankings)
