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Ronny P. Sasmita

Southeast Asia is quietly emerging as a key arena in the global race for rare earth elements, the critical minerals powering everything from smartphones and electric vehicles to renewable energy systems and advanced weapons. As the world moves towards clean energy and digital transformation, control over these minerals has become central to geopolitical competition.
While China still dominates global production and refining, countries such as Malaysia, Indonesia and Vietnam find themselves sitting atop valuable untapped reserves. The pressing question is: who will truly benefit, the Southeast Asian nations themselves, the United States or China?
Malaysia has stepped forward to leverage its potential. With deposits estimated at over 16 million tonnes, the government is working to build domestic processing and magnet manufacturing capacities. It has allocated 10 million ringgit (US$2.4 million) for resource mapping and downstream development, including through joint ventures.
By blending foreign expertise with local equity, Malaysia aims to retain more value. Yet China’s dominance of refining technology means that much of the profits could still flow north. Even though the minerals lie beneath Malaysian soil, the knowledge and capacity to turn them into strategic assets remain largely Chinese.
Indonesia holds some of the region’s largest reserves, mainly in Bangka Belitung, Sulawesi and Kalimantan. Minerals such as monazite contain neodymium and praseodymium, the two rare earth elements vital to the permanent magnets in electric motors and defence systems. Jakarta is pushing to develop domestic refining and value-added industries, mirroring its nickel downstreaming strategy.
However, in the face of enormous technological hurdles, Indonesia might have to partner with Chinese firms. A likely scenario is that the country profits from mining and partial processing, while China retains control of more advanced technology and the market, and the US continues to be a consumer of finished goods that are made in China with Southeast Asian inputs.




Vietnam is another contender from Southeast Asia. However, while it has sizeable deposits in provinces like Lai Chau, they are largely underdeveloped. Its government is courting foreign investment to build processing and extracting facilities, but also faces the problem that China dominates the refining technology.
Thailand, Laos and the Philippines are emerging as supporting players. Thailand has signed a memorandum of understanding with the US on developing rare earths. In Laos, joint or Chinese ventures have started to explore rare earths. The Philippines has rare earth deposits in Mindoro, Zambales and Palawan, as yet untapped.
For the United States, Southeast Asia’s rare earths offer both opportunity and risk. Washington sees some of these countries as possible hedges against China’s near-monopoly on the rare earth magnets vital to the defence and green technology sectors. Yet the US has invested little in local refining or technology transfer.
Without such involvement, it remains dependent on Chinese-controlled supply chains. China, on the other hand, stands to benefit doubly by securing raw materials from the region while keeping the technology and refining capacity that determine true value.


Globally, Southeast Asia’s rare earths are gaining importance. As the world accelerates electrification and renewable energy transitions, demand will continue to surge. Any disruption or shift in Southeast Asia’s output could reverberate across global markets, affecting prices, innovation and strategic balance. The members of the Association of Southeast Asian Nations are no longer just resource suppliers, they are potential pivot points in a high-stakes geopolitical contest.
For now, China remains the clear winner. Its companies dominate exploration, processing and downstream production, ensuring the access to minerals and control of technology that create strategic leverage. The US benefits mainly as an end user.
Southeast Asian nations are only beginning to move up the value chain, but dependence on foreign technology and capital will limit their gains. Their central challenge is attracting investment without surrendering control over strategic resources.
In the coming years, competition will only intensify. Malaysia, Indonesia and Vietnam are cautiously balancing foreign partnerships with domestic priorities. Thailand, Laos and the Philippines are still figuring out how to enter the game without compromising environmental and governance standards.


The geopolitical balance still favours China, with its technological superiority and financial muscle. Yet if the US and its allies begin investing meaningfully in Southeast Asia’s refining and industrial capacity, they could gradually shift that balance.
Even the recent meeting between US President Donald Trump and Chinese President Xi Jinping in Busan underscores why Southeast Asia’s rare earths will remain a strategic battleground. The US and China agreed to postpone export controls on rare earths and semiconductors respectively, a move that Trump framed as a win for the world.
However, the rare earths agreement is temporary and is expected to be negotiated annually. The reality is that the stand-off over rare earths versus advanced microchips is likely to persist for years, cementing rare earths as a powerful geopolitical lever for China.
In the years ahead, Southeast Asian nations cannot merely be passive sources of critical minerals. Instead, they must become significant figures in a long-term strategic contest where resource diplomacy shapes technological advantage, supply chain security and the global power balance.


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Rare earths

Can Southeast Asia benefit from the global race for rare earths?

Thai demonstrators wearing masks of Thai Prime Minister Anutin Charnvirakul and US President Donald Trump protest against 
a US-Thailand memorandum of understanding on rare earth minerals cooperation, outside the US Embassy in Bangkok, on October 30. Photo: EPA

Gone are the days of unlimited US power in Southeast Asia

Illustration: Craig Stephens

From the left, Singapore’s Prime Minister Lawrence Wong, East Timor’s Prime Minister Xanana Gusmao, US President Donald Trump, Vietnam’s Prime Minister Pham Minh Chinh and Cambodia’s Prime Minister Hun Manet mingle during the Asean Summit at the Kuala Lumpur Convention Centre in Malaysia, on October 26. Photo: EPA / Pool

US Secretary of State Marco Rubio attends a bilateral meeting between Trump and Malaysian Prime Minister Anwar Ibrahim during the Asean summit in Kuala Lumpur, Malaysia, on October 26. Photo: Reuters

Chinese Premier Li Qiang (right) walks with Malaysia’s Prime Minister Anwar Ibrahim as he arrives at the Kuala Lumpur Convention Centre to attend the Asean Summit in Malaysia, on October 27. Photo: Pool Photo via AP

How China can anchor Southeast Asia’s future in an uncertain world

China’s Premier Li Qiang (left) shakes hands with Malaysia’s Prime Minister Anwar Ibrahim, the 2025 Asean chair, on the sidelines of an Asean summit in May. Photo: Handout

Indonesia’s Morowali Industrial Park, one of the biggest nickel producers in Southeast Sulawesi province. Photo: AFP

A train on the Jakarta-Bandung High-Speed Railway in Indonesia. Photo: Xinhua

Workers are seen inside a solar cell factory run by Trina Solar in Bac Giang province, Vietnam. Photo: Xinhua

China’s Foreign Minister Wang Yi (centre) with his counterparts from Asean member states at a summit in Kuala Lumpur in July. Photo: AFP

US signs rare earth MOUs with Malaysia, Thailand. Can it hedge against China?

US President Donald Trump is pictured next to Malaysian national flags before he departs on Air Force One from Kuala Lumpur International Airport in Sepang on October 27. Photo: AFP

US President Donald Trump looks on next to people waving Malaysian national flags before he departs on Air Force One from Kuala Lumpur International Airport in Sepang on October 27. Photo: AFP

Opinion

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The region’s deposits are gaining importance, but nations are just starting to move up the value chain that is dominated by China


The region’s deposits are gaining importance, but nations are just starting to move up the value chain that is dominated by China.


Asean

US-China relations

Indonesia

Vietnam

Malaysia

Thailand

Laos

The Philippines

United States

China

South Korea

Donald Trump

Xi Jinping

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Can Southeast Asia benefit from the global race for rare earths?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The region’s deposits are gaining importance, but nations are just starting to move up the value chain that is dominated by China

The region’s deposits are gaining importance, but nations are just starting to move up the value chain that is dominated by China