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Asean, China, Japan and South Korea hold ‘transformative’ critical minerals opportunity
Director of Asean+3 Macroeconomic Research Office says some Southeast Asian economies have notable reserves
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Rare earths | Asean | Asean+3 Macroeconomic Research Office | China-Asean relations | US-Asean relations | China economy | Mainland China | United States | Malaysia
US President Donald Trump signed a critical minerals deal with Malaysian Prime Minister Anwar Ibrahim on the sidelines of the Asean Summit in Kuala Lumpur on October 26. Photo: AFP
Ralph Jennings
Published: 9:00am, 15 Nov 2025Updated: 1:26pm, 17 Nov 2025
Southeast Asian economies, along with China, Japan and South Korea, have a “transformative” opportunity to enter the world’s critical mineral supply chain, said Yasuto Watanabe, director of the Asean+3 Macroeconomic Research Office (AMRO).
Critical minerals – essential raw materials for the production of hi-tech gadgets, cars and aerospace equipment – will make the 11-member Association of Southeast Asian Nations’ (Asean) supply chain “more resilient and sustainable”, said Watanabe, who also serves as AMRO’s CEO.
The office was set up by the finance ministers of the Asean member states and the “plus three” – China, Japan and South Korea – following an agreement in 2009.
“Several member economies possess notable reserves and are actively exploring ways to integrate more deeply into the fast-growing clean-technology and advanced-manufacturing ecosystems,” he told the Post on Wednesday.
“Viewed through an ‘Asean plus three’ lens, the opportunity is transformative,” he said, with the Southeast Asian economies contributing resources and their “strategic location” to the critical minerals supply chain, and the other economies offering capital and technology.
In October, the United States signed memorandums of understanding with Asean members Malaysia and Thailand to secure critical minerals, namely the 17-member subset known as rare earth elements. These minerals are in particularly high demand for their utility in crafting permanent magnets and other technologically demanding components.
Malaysia already has processing capacity, setting it apart from other countries that just have reserves. Developing a mine from scratch to export capacity can take up to a decade, analysts have said.
The region must overcome … huge upfront costs in early-stage exploration
Deepali Bhargava, ING
The role of critical minerals in global supply chains received widespread attention this year when China – which accounts for about 70 per cent of global rare earth mining and 90 per cent of processing output, according to the Centre for Strategic and International Studies think tank – expanded the scope of its export controls on the materials.
The move alarmed Washington, hastening its search for alternative sources as it seeks to mitigate Beijing’s near-monopoly status, a source of leverage for China in the two countries’ prolonged trade war.
While Southeast Asian countries had a chance to produce some rare earth metals, given their extensive deposits, they would find it hard to “catch up” with China due to a lack of processing technology, said Liang Yan, a professor of economics at Willamette University in the US.
China might end up providing that technology, she said.
Beijing’s 12-year-old Belt and Road Initiative, which is focused on building trade-linked infrastructure abroad, has been helping Southeast Asian countries with financing and technology.
This financing might come in the form of low-interest project loans, Liang said.
Deepali Bhargava, head of research and chief economist for Asia-Pacific with Dutch financial services firm ING, said access to funding would be essential for the region to make a difference in the minerals trade.
“To play a significant role in global [critical mineral] supply chains, the region must overcome … huge upfront costs in early-stage exploration and the need for funding across the entire value chain with a focus on sustaining autonomy and regional coordination.”
Ralph Jennings
Ralph Jennings joined the Political Economy desk as a Senior Reporter in August 2022 having worked as a freelancer since 2011. Ralph previously covered news for Thomson Reuters in Taipei and for local newspapers in California. He graduated from University of California, Berkeley with a bachelor’s degree in mass communication.
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Rare earths
Economy Global Economy
Baotou set to become China’s rare earth hub under Inner Mongolia’s 10-year plan
Initiatives include a boost to mining, refining and magnet production to supply new-energy industry and global markets while firms and nations race to diversify
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Inner Mongolia’s second-largest city, Baotou (pictured), has plans to become a world-leading hub for critical materials. Photo: Getty Images
Kandy Wong
Published: 6:30pm, 13 Nov 2025
A northern Chinese region that boasts the world’s biggest rare earth element (REE) mine is looking to develop its second-largest city, Baotou, into a world-leading hub for critical materials.
And analysts say the effort could further shore up China’s leading position in the supply chain.
In a 10-year development plan, which includes intentions to build a “solid ecological security barrier”, the Inner Mongolia autonomous region said it will make comprehensive progress on the protection and integrated use of critical minerals, launch a new round of strategic mine-exploration work, and accelerate the development of high-end rare earth functional materials.
The plan, issued on Wednesday and extending through 2035, says the application structure and spatial layouts for critical minerals will be optimised, and that the efficiency of resource utilisation will be enhanced.
Inner Mongolia is home to the Bayan Obo mine, which accounts for more than 40 per cent of the world’s known rare earth element reserves, and for nearly half of the global rare earth production, according to NS Energy Business, a news and analysis platform for the energy industry.
Rajiv Biswas, CEO of research firm Asia-Pacific Economics, said: “The strategic initiative to develop Baotou into an integrated rare earths supply-chain hub will further strengthen China’s position as the world’s REE producer.”
And he spoke to how “large-scale new investment of magnets using REE materials at Baotou will strengthen China’s global leadership in the production of magnets for new electric vehicles and wind turbines for renewable energy”.
What are rare earths, and why is China’s dominance facing global pushback
In July, Xinhua reported that Chinese geologists had identified a large deposit in Inner Mongolia of a previously unknown rare earth mineral – a new carbonate mineral dominated by neodymium. The so-called magnet metal is used to build electric-vehicle motors and offshore wind turbines.
Along the rare earth value chain, China holds 69 per cent of the global share, in terms of mine production, according to recent figures from Morgan Stanley. And in terms of magnet supply, the investment bank’s analysts said China controls 90 per cent of the global market share.
Rare earths are a point of leverage for Beijing amid export controls on chips by the United States. And Cory Combs, associate director and head of critical minerals and supply-chain research at Trivium China, said in a podcast on Sunday that “the private sector has found ways to not be shut down by all this chaos”.
“[The] private sector has worked out ways to survive through various stockpiles with other countries, getting various less-mature production chains at a higher cost, but they’re still able to get it,” he added.
When asked about China’s rare earth export-licensing system during a regular press briefing on Thursday, Ministry of Commerce spokesman He Yadong said China conducts export controls on rare earths in accordance with laws and regulations.
“China is committed to safeguarding national security and interests,” he said, adding that efforts were being taken “to maintain the stability of the global supply chain”.
As many of the world’s largest developing countries transition to electric vehicles and renewable energy, Biswas said the integrated rare earth element supply-chain hub at Baotou will “play a key role” in supplying processed materials.
“While global REE supply chains will gradually become more diversified over the next five years, China will continue to play a dominant role in global REE supply chains over the medium-term outlook to 2030,” he added.
Kandy Wong
Kandy Wong returned to the Post in 2022 as a correspondent for the Political Economy desk, having earlier worked as a reporter on the Business desk. She focuses on China's trade relationships with the United States, the European Union and Australia, as well as the Belt & Road Initiative and currency issues. She graduated from New York University with a master's degree in journalism in 2013. An award-winning journalist, she has worked in Hong Kong, China and New York for the Hong Kong Economic Journal and the Financial Times, E&E News, Forbes, The Economist Intelligence Unit, Nikkei Asia and Coconuts Media.
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