Critical transition minerals in selected ASEAN countries

The research examines bauxite/alumina, cobalt, copper, graphite, lithium, manganese, nickel and rare earth elements (REEs) across Cambodia, Indonesia, Myanmar, the Philippines and Thailand. Indonesia produced 59% of global nickel and held 42% of reserves in 2024, while also ranking second globally for cobalt production. The Philippines accounted for 8.9% of nickel production and 3.7% of reserves. Myanmar supplied 14.8% of global REE production in 2023, while Thailand reported a 14.8-million-tonne lithium discovery that could place it among the five largest resource holders if commercially viable. Cambodia reportedly has bauxite, copper and manganese resources, although geological data remain limited.

Shifting from raw exports to domestic processing

ASEAN countries are pursuing downstream processing to retain more economic value domestically. Indonesia has restricted exports of unprocessed nickel, bauxite and copper, attracting investments including the Hyundai-LG battery cell plant. The Philippines announced a similar ore export ban in early 2025 but suspended it in June because of power and infrastructure constraints. Thailand aims for electric vehicles to comprise 30% of vehicle production by 2030, although its mineral-processing model remains import-dependent.

Geopolitical rivalries and regional dependencies

China is ASEAN’s primary trading partner and a major source of critical-minerals investment. More than 90% of Indonesia’s nickel and cobalt matte exports go to China, while China is Myanmar’s sole REE export partner and supplies expertise and chemicals for extraction and processing. Chinese Belt and Road Initiative investment also supports Cambodia’s mining infrastructure. The US has expanded critical-minerals partnerships with ASEAN countries, while the EU has established a partnership with Indonesia, reflecting the minerals’ importance for clean technologies and national security.

Social, environmental, and market challenges for Southeast Asia’s critical minerals

Mineral expansion presents substantial environmental and social risks. Unregulated REE mining in northern Myanmar is associated with soil and water pollution and armed conflict, while Indonesian nickel processing relies heavily on captive coal-fired power. Between 2011 and 2025, the Business and Human Rights Resource Centre recorded more than 50 allegations involving transition minerals in Indonesia and the Philippines; 90% were in Indonesia. Reported impacts include unsafe working conditions, low pay, land dispossession, water contamination, deforestation, biodiversity loss and threats against Indigenous Peoples, communities and human rights defenders.

Growing trade agreements, missing safeguards

Critical-minerals agreements and MoUs generally provide weak safeguards for equitable value sharing. Few link tariff benefits to local value creation, while local hiring quotas, community development contributions and prioritisation of domestic mineral needs are absent. Fair-pricing mechanisms are largely missing, apart from a vague reference to price floors in the US–Thailand MoU. Sustainability commitments are generally non-binding, with no binding requirements for free, prior and informed consent (FPIC) of Indigenous Peoples.

Recommendations for ASEAN member states, selected resource-rich countries, and regulators

Fair Finance Asia recommends implementing UN principles for equitable transition minerals; mandatory environmental and human rights due diligence; legally protected FPIC; mandatory environmental, social and cumulative impact assessments; and stronger grievance mechanisms. Governments should strengthen fiscal and benefit-sharing frameworks, require country-level financial disclosure, support downstream value addition and technology transfer, and implement EITI standards.

Sustainable finance taxonomies should move beyond voluntary guidance, incorporate environmental and social screening criteria, align with international human rights and labour standards, establish time-bound decarbonisation pathways for mining and processing, and require traceability and disclosure of critical minerals’ end uses.