Southeast Asia and India sit on critical-minerals wealth, but value capture remains elusive

The energy transition is increasingly determined by critical minerals supply chains, with lithium, nickel, cobalt, graphite and rare earth elements setting the pace for electrification. But in Southeast Asia and India—home to substantial raw material reserves—the challenge is not finding resources; it is converting geological wealth into industrial and technological value that investors can reliably monetize.

OECD highlights an upstream-versus-downstream imbalance

An OECD assessment points to a persistent structural mismatch: upstream resource dominance is strong, while downstream processing capacity remains weak and value capture is limited. The resulting gap is already reshaping global trade patterns, investment flows and geopolitical competition across the technology and battery materials sector.

Southeast Asia’s nickel dominance meets limited control over refining

Southeast Asia plays a decisive role in global supply chains for critical minerals. The region holds around 46% of global reserves for the materials at the center of electrification. Indonesia and the Philippines account for roughly 68% of global nickel production, making their output important for electric vehicle (EV) batteries and energy storage systems.

Nickel is not the only strategic input. The region also holds significant shares of cobalt, graphite and rare earth resources. Yet despite this raw-material strength, much of the value continues to be captured outside Southeast Asia. China remains dominant in refining and battery manufacturing, exporting $66.3 billion in battery packs in 2023 while controlling large segments of processing capacity—meaning Southeast Asia supplies inputs but rarely controls final industrial output.

India’s resource potential is constrained by import dependence

India represents another major pillar of critical-minerals potential, holding about 7–8% of global rare earth reserves and developing deposits of additional materials including lithium. However, development remains limited: only 10–20% of mineral potential is currently utilized.

This underdevelopment translates into structural dependency. India is reported as being 100% import-dependent for lithium, cobalt and nickel, spending approximately $1.3 billion annually on battery materials. As EV adoption accelerates, the reliance on imports is increasingly viewed as a strategic vulnerability within the broader tech and energy transition supply chain.

Even with upstream resources available domestically or regionally, downstream refining, chemical conversion and battery manufacturing remain concentrated in China across nearly every stage of the value chain. The consequence is a recurring pattern: resource-rich economies export raw or semi-processed materials while higher-value production—batteries, cathodes and advanced components—occurs elsewhere. In turn, most economic gains from the lithium and nickel economy are captured outside Southeast Asia and India.

Indonesia’s push shows how policy can shift value—but not eliminate dependency

Indonesia illustrates how industrial policy can change outcomes in raw-material markets. Through export bans on unprocessed nickel alongside aggressive downstream investment policies, Indonesia has developed more than 40 nickel processing facilities.

The strategy has helped Indonesia become the world’s largest refined nickel producer. Still, much of the investment and technology comes from China. That means Indonesia captures more value than before but remains partially dependent on external capital and processing expertise. The article also flags growing pressure tied to energy-intensive refining methods used to produce battery-grade materials.

ASEAN strategies vary; India leans on domestic development plus overseas acquisitions

Across ASEAN, approaches to critical minerals development are described as inconsistent:

The Philippines is balancing export controls with efforts to attract foreign investment; Vietnam is building partnerships for rare earth processing and magnet manufacturing; Malaysia and Thailand are focusing on downstream electronics and battery components.

India’s approach differs in scope through its National Critical Minerals Mission, which aims to secure supply chains via domestic development as well as overseas acquisitions. Institutions such as KABIL are described as investing abroad specifically to reduce import dependency in lithium and nickel markets.

Export restrictions are rising as supply chains become politicized

The article frames critical-minerals supply chains as increasingly politicized. Export restrictions have increased more than fivefold since 2009 and now affect over 20% of global mineral trade.

China’s controls on graphite, gallium and germanium—combined with Indonesia’s nickel export restrictions—are presented as part of a broader shift toward resource nationalism that influences industrial planning across EV manufacturing, semiconductors and renewable energy technologies. At the same time, Western policy frameworks such as the EU’s referenced initiative (EU) and the US Inflation Reduction Act are accelerating efforts to diversify supply chains away from concentrated sources.

Demand growth collides with weakening mining investment

Despite rising demand for lithium, nickel and battery metals, global investment in mining and extraction is weakening. Foreign direct investment fell to $1.49 trillion in 2024, while extractive-sector greenfield projects dropped sharply to around $40 billion.

This creates a structural mismatch: demand for key inputs is rising rapidly while capital deployment slows down. Without renewed investment, supply constraints could intensify across global tech and EV markets.

A strong long-term market outlook underscores why integration matters

The long-term outlook remains favorable for regional demand growth. Southeast Asia alone is expected to reach 8.5 million EV sales by 2035, while its green technology market could expand from $5 billion in 2020 to $50 billion by 2050. That expansion reinforces why critical minerals supply chains matter—particularly for lithium-ion batteries used in energy storage systems and renewable infrastructure.

The core problem: resource wealth without integrated industrial control

The central issue across Southeast Asia and India is described not as resource scarcity but system fragmentation across mining (upstream), refining (midstream) and manufacturing (downstream). Integration between these stages remains weak. Export bans may encourage domestic processing but environmental regulation can slow project development; meanwhile foreign investment often brings essential funding yet also external control over technology and infrastructure.

The result is a paradox highlighted throughout the analysis: countries provide raw materials essential for the tech and energy transition while struggling to participate fully in value creation—an outcome that carries direct implications for investors seeking exposure beyond commodity supply into more durable industrial returns.