Southeast Asia’s potential in critical minerals
The global race to gain access to critical minerals is accelerating. President Trump is eager to exploit deposits in Ukraine and Greenland, while China is deploying its wealth of rare earth minerals as a key weapon in the trade war with the US.
Southeast Asia could use them as a bargaining tool with President Trump in negotiations over the tariffs while developing the region’s large deposits of rare earth elements could generate a flood of foreign foreign investment and generate trillions of dollars in exports. Adrian Ashurst, CEO of Worldbox Intelligence investigates.
Southeast Asia has significant natural reserves of several critical minerals, including nickel, tin, and bauxite, and the region is still not fully explored. These critical minerals are essential to the worldwide energy transition. The region is also home to rare-earth elements (REER), a group of 17 elements that are crucial to the manufacture of many high-tech products. It is unusual to find them in pure form and they are difficult to extract.
Examples of REERs include Neodymium which is used to make powerful magnets for loudspeakers, computer hard drives, EV motors and jet engines. Yttrium and Europium are a key component in television and computer screens. They are also essential components for the defence industry featuring in vital US weapons, from F-35 stealth fighter jets to nuclear-powered attack submarines and drones.
The US has few REERs, while China has them in abundance: the International Energy Agency (IEA) estimates that China accounts for about 61% of rare earth production and 92% of their processing.1
Figure 1: Refined production of rare earth materials in 2023
https://www.bbc.com/news/articles/c1drqeev36qo
A key card in the Sino-US trade war
China is now using this near monopoly in its trade war with the US. In April, it began ordering “restrictions on the exports of seven rare earth minerals – most of which are known as “heavy” rare earths, which are crucial to the defence sector”, according to the BBC. President Trump has responded by ordering an investigation into how the US can boost production of critical minerals and cut reliance on imports.
Trump has already said he wants to exploit the critical minerals available in Greenland and the Ukraine. Southeast Asia could also emerge as a key supplier to the US of chemical elements, that “are set to become as indispensable to the world of renewable energy as oil and gas have been to the fossil fuel era”, according to the ASEAN Centre for Energy.2
According to 2023 data from the US Geological Survey, Southeast Asia possesses 46% of the world’s nickel reserves, 22.7% of global bauxite, 20% of rare earth elements and 6.9% of the world’s cobalt. ASEAN also leads global production in nickel (63%) and tin (42%). Other minerals such as manganese (3%), and copper (4%) have also been mined and produced as ores in the region.3 Below we look at the major producers of critical minerals within ASEAN.
Indonesia’s key role in nickel output
Indonesia is already a major producer of nickel and is home to around 25% of the world’s nickel reserves. Nickel is a key component in the batteries that power electrical vehicles playing a crucial role in battery energy density and performance. Jakarta is also exploring the potential of REERs in Indonesia, to date uncovering the presence of REERs as monazite and xenotime. Indonesia’s other critical mineral resources include copper (640 million tons), bauxite (927 million tons), and tin (1.2 billion tons).
The Philippines vast untapped potential
The Philippines is among the five most mineral-rich nations in the world, with untapped reserves valued at USD 1 trillion, according to the ASEAN Centre for Energy.4 In February 2024, the Diplomat publication reported that only 5% of these reserves had been explored, and just 3% were covered by mining contracts.5 The country is hoping to sign a critical minerals’ deal with the US to lessen its dependency on China, which currently takes around 90% of the country’s nickel exports.6 The country signed an agreement to supply critical minerals to South Korea last September.
Myanmar emerges as globally significant supplier of rare earth minerals
Myanmar has become one of the world’s largest suppliers of heavy rare earth elements in recent years, according to research from the University of Warwick.7 Most rare earth mining is concentrated in Kachin state around the towns of Panwa and Chipwe, adjacent to southwestern China’s Yunnan province. All rare earths mined in this area are exported to China. The area was controlled by the New Democratic Army-Kachin, which is closely aligned with the Myanmar Army. However, in October 2024 the Kachin Independence Army (KIA), which is fighting the army, said it had taken control of Panwa.
A smaller amount of rare earth mining has also taken place close to the Chinese border northwest of the border town of Mai Ja Yang, according to the University of Warwick. The Kachin Independence Organisation, which is fighting the army, controls the area. All of the minerals are exported to China. Myanmar supplied China with about 50,000 metric tons of rare earth oxides, making it the world’s top exporter of heavy REOs, according to broker Ord Minnett.8
Malaysia’s vast potential
Malaysia is also rich in critical minerals. Malaysia’s National Mineral Industry Transformation Plan 2021-2030 launched in 2021, which has mapped mineral resources across the country, estimates the total of mineral resources in the country at RM4.11 trillion (around US$982bn). This includes US$160bn of rare earth minerals. The plan identified five strategic minerals: non-radioactive rare earth elements, bauxite, tin ore, silica sand and kaolin.
The plans also found that copper, tin, iron, manganese and gold and non-metallic minerals, including diamonds, dolomite, gypsum, mica, amethyst and quartz have an extensive presence in every state of Malaysia.9 The Malaysian Investment Development Authority is seeking foreign direct investment for the downstream development of the rare earths elements industry. However, the authorities insist that mining will be carried out in a sustainable manner.
Vietnam and Thailand could become key players
Viet Nam has substantial reserves of tungsten and rare earth elements, though production and refinement are still in the early stages. The country ‘s rare earth resource reserves, at 22 million tons, rank second only to China. The rare earth deposits are concentrated in the northern region.10 Antimony, bauxite, chromium, gold, iron, natural phosphates, tin, and zinc are also mined in Vietnam.
Thailand also has huge potential in mineral wealth. Its rare earths production reached 13,000 metric tons in 2024, up from just 1,000 metric tons in 2018, with most of it exported to China.11 The country’s other minerals include coal, natural gas, gold, fluorite, lead, manganese, rubber, limestone, basalt, niobium, zinc, tin, tungsten, gypsum, and lignite. The Mineral Resources Department says Thailand has up to 40 types of mineral resources spread across 19% of the country, and that the total value of these minerals amounts to 44.41 quadrillion baht (US$1.20 quadrillion) if exploited.12
Clearly, Southeast Asia has huge potential to become a key player in the supply of critical minerals and the rare earth elements vital to developing technologies. That could prove to be a very useful card to play in negotiations over tariffs with the US. Moreover, the industry has the potential to earn trillion of dollars in export earnings, attracting vast amounts of foreign direct investment in the process.
1. https://www.bbc.com/news/articles/c1drqeev36qo
2. https://aseanenergy.org/post/critical-minerals-as-the-new-gold-in-asean-energy-transition/
3. https://www.usgs.gov/publications/mineral-commodity-summaries-2023
4.https://aseanenergy.org/post/critical-minerals-as-the-new-gold-in-asean-energy-transition/
9. https://www.thestar.com.my/news/focus/2024/08/18/potential-rare-earth-bonanza-for-malaysia
Source: Worldbox Press Release
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