The journey towards net-zero emissions is one of the most significant global undertakings of our time. As countries push forward with their energy transitions, clean technologies and decarbonisation of heavy-emitting sectors – particularly energy – are at the forefront of this shift.
However, an essential ingredient in this endeavour often escapes the limelight: critical minerals.
In his recent op-ed, Cooperate, Not Compete: ASEAN’s Critical Mineral Strategy for Energy Transition, Research Associate at the Economic Research Institute for ASEAN and East Asia (ERIA) Ryan Wiratama Bhaskara highlights how the clean energy revolution is fuelling unprecedented demand for these vital resources.
The market for critical minerals, essential in manufacturing clean technologies such as batteries and solar panels, is projected to skyrocket to over USD770 billion by 2040.
However, this rapid growth comes with significant hurdles. Mineral production remains heavily concentrated in select regions, creating vulnerabilities in supply chains.
According to the International Energy Agency (IEA), only 70 per cent of the copper and 50 per cent of the lithium required by 2035 is likely to be met at current investment rates.
ASEAN’s strategic position in the critical mineral landscape cannot be understated.
As Bhaskara noted, the region is exceptionally well-endowed with these resources.
ASEAN member countries collectively hold 46 per cent of the world’s nickel reserves, 22.7 per cent of bauxite, 20 per cent of rare earth elements (REE), and 6.9 per cent of cobalt, according to the United States Geological Survey (USGS).
Additionally, ASEAN leads global production in nickel (63 per cent) and tin (42 per cent).
These minerals are essential for developing the batteries and solar photovoltaics (PV) critical to the energy transition.
Despite this wealth, most ASEAN member countries currently export raw minerals to be processed elsewhere, particularly in China.
For instance, in 2022, over 95 per cent of nickel from Indonesia and the Philippines was sent to China for processing, alongside nearly all manganese, REE, and tin ores from Myanmar.
This dependency has left the region vulnerable to external shocks while losing significant economic value in downstream industries.
Several ASEAN member nations have begun addressing this issue by investing in domestic downstream industries.
Indonesia’s push to develop a vertically integrated battery industry, leveraging its vast nickel reserves, is a prime example.
Meanwhile, Vietnam and Malaysia are advancing their electric vehicle (EV) sectors, with Vietnam’s VinFast gaining traction in international markets.
Collectively, these countries contribute about 10 per cent to global solar PV production, although only Malaysia and Thailand currently produce the critical polysilicon components required.
While these efforts are commendable, Bhaskara emphasised that the region’s fragmented approach is counterproductive.
Each country’s strategy often focuses on competing rather than collaborating, leading to inefficiencies and heightened geopolitical risks.
Indonesia’s 2020 ban on unprocessed nickel exports, for instance, sparked significant controversy.
While it boosted domestic production, it also raised environmental and social concerns.
The Philippines’ attempt to follow suit with its own export ban in 2023 faced backlash from the mining sector, prompting a pivot towards a ‘China-free’ nickel supply chain aimed at attracting Western investment.
Such competitive strategies risk undermining ASEAN’s ability to fully harness its critical mineral potential. Instead, Bhaskara argued for a synchronised regional approach.
Drawing inspiration from the European Union’s Critical Raw Materials Act, he proposed the establishment of a coordinated framework to pool resources, standardise policies, and integrate value chains across ASEAN member states.
A potential Critical Minerals Alliance could oversee mineral exploration, sustainable mining practices, and the development of refining and recycling facilities.
This cooperative framework would enable ASEAN member nations to collectively address supply chain bottlenecks, reduce dependency on external actors, and attract multinational investments.
Countries like Thailand, Indonesia, Malaysia and Vietnam could leverage their more advanced downstream industries, while others like the Philippines, Myanmar, and Cambodia focus on upstream and midstream roles.
Moreover, investments in battery recycling and sustainable mining practices would enhance both the security and sustainability of the mineral supply chain.
By fostering collaboration over competition, ASEAN could position itself as a global leader in the green economy.
Strengthened regional cooperation would not only ensure a stable and sustainable supply of critical minerals but also drive economic growth and create green jobs across the region.
Bhaskara’s insights serve as a compelling call to action for ASEAN policymakers. The road to net-zero requires more than just individual efforts; it demands a united regional front.
By embracing cooperation and prioritising shared goals, ASEAN can unlock its full potential in the clean energy transition, becoming a powerhouse in the global green economy. – Features Desk
