Highlights

• China dominates rare earth element production and processing.
• EU and ASEAN are seeking alternative supply chains.
• ASEAN nations possess significant critical raw material reserves but lack midstream processing infrastructure.
• Emerging geopolitical dynamics are transforming critical minerals into a diplomatic battleground for global economic influence.

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In a thought-provoking Observation Research Foundation (opens in a new tab) (ORF) Expert Speak essay published August 3, political scholar Zsuzsa Anna Ferenczy (opens in a new tab) examines deepening cooperation between the European Union and the Association of Southeast Asian Nations (opens in a new tab) (ASEAN) on critical mineral security. As global powers accelerate their net-zero and digital transition goals, the geopolitical stakes surrounding rare earth elements (REEs) and other critical raw materials (CRMs) have reached a boiling point.

China currently produces 60% of global REEs and processes 80%, making it the undisputed kingpin of the clean-tech supply chain. But recent export restrictions on gallium, germanium, graphite, tungsten—and even REE processing technologies—have jolted policymakers worldwide. ASEAN, sitting on an enviable 20% of global REE reserves and commanding major shares of nickel, tin, and bauxite, finds itself both a player and a pawn in this new geo-economic order.

Connecting EU and ASEAN

The article outlines the EU’s Critical Raw Materials Act, which aims to extract at least 10% and process 40% of its own CRM needs domestically—yet Europe still imports 98% of its REEs, with China the dominant source. On the ASEAN side, Indonesia, the Philippines, Vietnam, and Malaysia hold the mineral keys, but remain heavily dependent on Chinese processors. Despite shared interests, mutual hesitations remain: the EU faces a credibility gap in the region, while ASEAN remains divided in how forcefully to confront China's assertive diplomacy and maritime coercion.

What’s Clear

• ASEAN is rich in CRMs but weak in midstream infrastructure (separation, refining).
• The EU is overdependent on Chinese supply chains and is scrambling for alternatives.
• China’s weaponization of CRM trade is no longer hypothetical—it’s active.

What Retail Investors Should Ask

• Will ASEAN nations move fast enough to monetize their CRM reserves independently?
• Can the EU shift from “policy promise” to actual co-investment in refining capacity?
• Which companies are best positioned to bridge this East-West CRM gap—either in processing or offtake?—hint—keep an eye on the Rare Earth Exchanges global rankings

Final Word

The Ferenczy essay highlights the raw geopolitics of resource nationalism and dependency. ASEAN is no longer just a supply basin—it’s a diplomatic battleground for control of the energy transition. Investors should watch for new EU–ASEAN joint ventures, refining partnerships, and rare earth exchange mechanisms as this quiet mineral war unfolds.

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