Critical minerals in Southeast Asia and India

Executive Summary

The growing demand for critical minerals (such as lithium, nickel, cobalt, rare earths and graphite) as key components in digital and industrial technologies, presents new opportunities and challenges for Southeast Asia and India. With abundant mineral reserves, close proximity to key trading partners and strong manufacturing capacity, the region could harness the potential of critical minerals to attract investment and drive economic growth. Persistent challenges (including environmental concerns, supply chain vulnerabilities, and gaps in downstream activity) however threaten the economic potential and sustainability of the critical minerals sector. This report draws on regional data and policy analysis to provide an overview of critical minerals in Southeast Asia and India, covering critical mineral reserves, production concentrations, trade dynamics, socio-environmental risks, and national and regional policy approaches.

Opportunities for Southeast Asia and India

Southeast Asia and India, with their ample mineral endowments and established manufacturing base, stand to benefit from the shift towards green and digital technologies. Multiple industrial and manufacturing sectors rely on critical minerals as a key resource and demand for critical minerals is projected to grow sharply.

Southeast Asia’s natural resource base is among the world’s richest. The region holds about 46% of global nickel reserves, nearly a quarter of bauxite, 6–7% of cobalt and significant rare-earth and tin deposits. Indonesia and the Philippines dominate nickel output, together accounting for 68% of global nickel production; and Malaysia, Thailand and Viet Nam are growing hubs for clean-technology manufacturing. India’s potential is also significant, with 7–8% of global rare-earth reserves, 3% of natural graphite, and newly discovered lithium deposits in Jammu and Kashmir.

In the region, countries are increasingly looking to expand further into refinement and processing, with Indonesia standing as a strong example of downstream value addition. Indonesia’s downstream push, concentrated at midstream levels of the value chain, has expanded refining capacity in recent years and attracted large-scale foreign investment. Malaysia and Viet Nam have also found some success in refinement of rare-earths metals, although space exists to increase the value addition of ASEAN countries in critical mineral value chains.

Southeast Asia also stands to benefit in the shift of advanced manufacturing towards green technologies. Countries with less critical mineral production, such as Thailand, are leveraging their existing manufacturing base to gain a foothold in EV, battery-component, photovoltaic manufacturing.

Capacity and policy constraints across the region

The region continues to face capacity and policy gaps that constrain countries’ ability to harness critical minerals reserves for economic development objectives. A particular risk is that processing is still overwhelmingly concentrated in China, which makes ASEAN and India vulnerable to supply disruptions, price volatility and political leverage. At the same time, rapid expansion of mining and refining raises environmental and social risks, given concerns over emissions, waste management and community impacts, as seen in Indonesia’s laterite nickel operations, rare-earth mining in Myanmar and nickel mining in Palawan, Philippines.

Countries’ capacity to respond to these challenges can often be constrained by challenges related to investment, skills and policy priorities. Financing for extractives and processing has tightened globally due to environmental scrutiny and market uncertainty while skills remain limited in areas such as environmental, social and governance (ESG) auditing and waste management. This is compounded by fragmented and competing policy priorities that reduce the effectiveness of regional initiatives, as countries pursue different national approaches and compete for investment.

Geopolitical trends shaping critical minerals supply chains

These challenges take place against the backdrop of global geopolitical trends that are reshaping trade and investment. Export restrictions have multiplied fivefold since 2009, with more than one-fifth of global mineral exports subject to at least one restriction. In parallel, major economies are embedding critical minerals into national and multilateral industrial and security strategies. ASEAN and India are active in this evolving global architecture, participating in the Forum on Resource Geostrategic Engagement (FORGE), the Supply Chain Resilience Initiative (SCRI) and the Quad Critical Minerals Initiative (QCMI).

Diverse policy frameworks

Across Southeast Asian countries and in India, a diverse set of national strategies is emerging to capture downstream value from critical minerals while reducing external dependencies. Indonesia is pursuing resource-based industrialisation, linking mining to domestic smelting and EV manufacturing, an approach that has made it the world’s largest nickel refiner. In India, the National Critical Minerals Mission (NCMM) seeks to reduce import dependency, promote sustainable mining and strengthen international partnerships, with the new 2026-2027 Union Budget allocating substantial capital for India’s Rare Earth Permanent Magnets (REPM). The Philippines is seeking to attract investment by offering a diversified nickel supply chains. Across the rest of ASEAN, Viet Nam is fostering rare-earth partnerships with Australia, Korea and Japan while Malaysia, Thailand and Singapore are expanding downstream clean-technology and battery-component manufacturing. These initiatives illustrate the growing determination to capitalise on the demand for critical minerals.

Despite these efforts, there is still space for increased regional cooperation to translate the region’s mineral resources into economic growth. At the regional level, the ASEAN Minerals Cooperation Action Plan (AMCAP IV 2026-2030) provides a strong blueprint for cooperation, but there is a need to build governance capacity before these objectives can be fully realised.

The way forward

Key policy recommendations highlighted in this report include:

• Enhancing transparency and market information. Improve investor confidence and market predictability by strengthening the ASEAN Minerals Database and Information System (AMDIS), linking it with global disclosure standards such as the Extractive Industries Transparency Initiative.

• Mobilising investment and skills for value addition. De-risk investment in refining and recycling by encouraging sustainable financing, including blended public-private models. Regional training programmes in mineral processing, environmental management and clean-smelting technologies could accelerate knowledge transfer.

• Advancing circularity and innovation. Reduce dependence on primary extraction by expanding recycling activities and advancing research partnerships on cleaner processing technologies and alternative chemistries.

• Deepening India–ASEAN cooperation. Integrate critical minerals into the ongoing review of the ASEAN–India Trade in Goods Agreement (AITIGA) to enable new investment partnerships, joint ventures and technology exchanges, reinforcing regional supply-chain resilience.