CRITICAL MINERALSOpportunities for Australia–ASEAN Collaboration on Critical Minerals

By Hanh Nguyen

Southeast Asia’s energy transition is coming to life as the development of green technologies accelerates across the region. Securing critical minerals will be crucial to this process, and Australia should work with Southeast Asia to realize their mutual goals in this area.

If Southeast Asian countries pursue policies in accordance with the Paris agreement to limit global temperature rises to 2°C, the market size for green technologies in the region is projected to increase from just under US$5 billion in 2020 to nearly US$20 billion in 2030 and US$50 billion in 2050. Several Southeast Asian states have introduced national agendas and policies to address the impact of climate change and increase their energy security through renewables. Some also see the energy transition as an opportunity to pursue more sustainable economic growth by becoming players in the electric vehicle and battery supply chains.

Critical minerals are essential components of many clean-energy technologies. More critical minerals are used to build solar farms, wind farms and electric vehicles than fossil-fuel-based alternatives, and the growing demand for green technologies in Southeast Asia will amp up the pressure on governments to provide a robust and resilient critical-mineral supply chain.

Mining and processing critical minerals for exports could bring immense revenues to Southeast Asian states and help them establish themselves in regional supply chains for green technologies. A strong mining and refining sector would also attract investment in green energy manufacturing, such as battery production. By building these sectors, Southeast Asian states would not only have a secure supply of critical minerals domestically, but also stand to benefit in the market, helping them reinvest further in their energy transition.

Some Southeast Asian states have already begun to invest in refinement and processing. Indonesia, for instance, has leveraged its position as the world’s biggest nickel producer to set up domestic processing facilities, even going as far as enacting protectionist bans on the export of unprocessed nickel ore.

The region could be a major player in supplying critical minerals and developing key supply chains. ASEAN already accounts for 46% of global nickel production and 34% of tin production. Indonesia and the Philippines are two of the world’s largest producers of nickel, which is used in batteries and electrolysers. Rare-earth minerals, a critical component for producing certain types of electric vehicle motors and wind turbines, are a major export for Myanmar.