OECD Flags Southeast Asia & India as Critical Mineral Powerhouses-But the Real Value Still Escapes

Highlights

• OECD report reveals Southeast Asia and India possess major critical mineral reserves (46% of global nickel, 7–8% rare earths) but capture limited economic value due to weak downstream processing and Chinese midstream dominance.
• Indonesia leads regional refining efforts, particularly in nickel, yet relies heavily on Chinese financing and technology, with gains concentrated in early-stage processing rather than full value-chain integration.
• Transition from resource holders to value creators hinges on scaling, refining, and manufacturing capabilities, but faces constraints including environmental pressures, governance gaps, fragmented policy coordination, and tightening capital flows.

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An April 2026 OECD background paper (opens in a new tab) led by Anita Prakash, with Hans Koger and Marta Bertanzetti, concludes that Southeast Asia and India hold major reserves of critical minerals—nickel, rare earths, cobalt, and graphite—and are well positioned to benefit from the global energy transition. Yet the report makes a critical point: despite this geological advantage, most of the economic value is captured elsewhere due to weak downstream processing, continued reliance on Chinese midstream capacity, fragmented policy implementation, and mounting environmental and geopolitical risks.

Study Methods and Scope

The OECD analysis integrates USGS resource data, World Bank trade flows, investment trends, and national policy frameworks to map the region’s role in global supply chains. It blends quantitative reserve and production metrics with qualitative case studies across ASEAN and India, focusing on countries such as Indonesia, Vietnam, and the Philippines.

Key Findings—Resource Rich, Value Constrained

The region’s resource base is substantial. ASEAN alone holds roughly 46% of global nickel reserves and meaningful shares of cobalt, graphite, and rare earths, while India accounts for an estimated 7–8% of global rare earth reserves.  However, downstream capacity remains limited. Processing, refining, and battery materials production are still heavily concentrated in China, which continues to dominate the global supply of processed minerals and battery components. At the same time, export restrictions have surged—now affecting over 20% of global mineral trade—highlighting rising geopolitical tension and supply risk.

Indonesia stands out for building domestic refining capacity, particularly in nickel. But even here, value capture is uneven and often reliant on Chinese financing and technology, with most gains concentrated in early-stage processing rather than full value-chain integration.

Implications—Execution Is the Bottleneck

The opportunity is clear: Southeast Asia and India could become central nodes in global supply chains. But the transition from resource holders to value creators depends on scaling, refining, manufacturing, and technology capabilities.

Key constraints include environmental pressures, governance gaps, illegal mining, tightening capital flows into the extractives sector, and fragmented regional policy coordination. These factors collectively limit execution speed and investor confidence.

Limitations and What’s Missing

While comprehensive, the report understates several structural realities: the technical complexity and cost of rare-earth separation, the decade-long timelines required to build midstream capacity, and the durability of China’s dominance in magnets and heavy rare-earth processing. It also assumes regional cooperation will deepen—an outcome that remains uncertain given competing national agendas.

Conclusion—Control Requires More Than Resources

Southeast Asia and India are strategically positioned but not yet structurally independent. Resource ownership alone does not translate into supply chain control.

For investors and policymakers, the signal is clear: the next phase is not discovery—it is execution.

Citation: OECD Critical Minerals Forum, Regional Note on Critical Minerals in Southeast Asia and India, April 2026.