Southeast Asian economies have a “transformative” opportunity to enter the world’s critical mineral supply chain amid China-US trade tensions, a senior Asian economist said.
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Critical minerals – essential raw materials for the production of hi-tech gadgets, cars and aerospace equipment – will make the 11-member Association of Southeast Asian Nations’ (Asean) supply chain “more resilient and sustainable”, said Yasuto Watanabe, director of the Asean+3 Macroeconomic Research Office (AMRO).
The office was set up by the finance ministers of the Asean member states and the “plus three” – China, Japan and South Korea – following an agreement in 2009.
“Several member economies possess notable reserves and are actively exploring ways to integrate more deeply into the fast-growing clean-technology and advanced-manufacturing ecosystems,” Watanabe told the Post on Wednesday.
“Viewed through an ‘Asean plus three’ lens, the opportunity is transformative,” he said, with the Southeast Asian economies contributing resources and their “strategic location” to the critical minerals supply chain, and the other economies offering capital and technology.
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In October, the United States signed memorandums of understanding with Asean members Malaysia and Thailand to secure critical minerals, namely the 17-member subset known as rare earth elements. These minerals are in particularly high demand for their utility in crafting permanent magnets and other technologically demanding components.
Malaysia already has processing capacity, setting it apart from other countries that just have reserves. Developing a mine from scratch to export capacity can take up to a decade, analysts have said.