Much for Asean to learn from Europe’s push for rare earths

The bloc must learn to shape its role in the critical minerals economy with foresight and coordination, or risk becoming an arena where others compete for control.

Europe’s increasingly urgent search for rare earth elements is not merely an industrial story about mining in Sweden or refining capacity in Germany.

It is a strategic warning to the rest of the world — especially to Asean — about how power is being redefined in the 21st Century.

In an era shaped by energy transition, digitalisation, and militarised technology, control over critical minerals has become as consequential as control over sea lanes once was.

For Europe, the realisation has come late.

For decades, European policymakers assumed that globalisation would guarantee smooth access to raw materials.

That assumption collapsed as Europe discovered the depth of its dependence on China, which dominates not only the mining of rare earths but, more crucially, their processing, separation, and conversion into high-performance magnets.

These magnets are indispensable to wind turbines, electric vehicles, precision-guided weapons, and advanced manufacturing.

Europe’s current scramble — from reopening old mines to negotiating supply agreements abroad — is therefore less about ambition than survival. Without secure access to rare earths, Europe’s green transition, industrial competitiveness, and defence autonomy are all exposed.

Normative power, regulatory leadership, and market size mean little if the physical inputs of modern industry are controlled elsewhere.

This predicament carries direct relevance for Asean.

Asean sits at the crossroads of the global rare earth and critical minerals map.

Several Southeast Asian countries — including Malaysia, Vietnam, Myanmar, and Indonesia — possess significant reserves of rare earths and related critical minerals.

Yet, like Europe in the past, Asean has often exported raw or semi-processed materials while leaving value-added stages — refining, alloying, magnet production — to external powers.

The European experience demonstrates that such arrangements may generate short-term revenue but create long-term strategic vulnerability.

Europe’s rare earth push also underscores a deeper transformation in global political economy. Supply chains are no longer neutral conduits of trade. They are strategic assets.

Export controls, environmental regulations, and “friend-shoring” policies are increasingly used as tools of statecraft. What used to be framed as market efficiency is now subordinated to national resilience.

For Asean, this shift presents both opportunity and risk.

On the opportunity side, Europe’s diversification away from China opens space for Southeast Asia to position itself as a critical partner.

Asean countries can attract investment into mining, processing, and recycling facilities, leveraging Europe’s desire for diversified and “responsible” supply chains.

Malaysia’s emerging rare earth processing capacity, Vietnam’s magnet ambitions, and Indonesia’s broader critical minerals strategy could all benefit from Europe’s recalibration.

Yet opportunity without strategy invites dependency of a different kind.

If Asean merely replaces one dominant buyer with another — exporting unprocessed materials while importing finished technologies — the region risks reproducing the very asymmetries Europe now regrets.

Strategic relevance does not come from being a quarry; it comes from owning parts of the value chain that others cannot easily replace.

Europe’s struggle also exposes a political dilemma that Asean knows well: how to reconcile environmental protection with strategic necessity.

Rare earth mining is environmentally intrusive. Processing involves toxic chemicals and waste management challenges.

Europe’s regulatory delays reflect genuine social concerns, but they also reveal how values can collide with power realities.

Asean governments will face similar pressures from civil society, indigenous communities, and environmental groups.

The lesson is not to lower standards, but to plan holistically.

Strategic autonomy requires investment in cleaner extraction technologies, regional environmental governance, and transparent regulatory regimes.

Without these, rare earth development will provoke domestic backlash and international criticism, undermining long-term credibility.

There is also a geopolitical layer Asean must not ignore. Europe’s rare earth anxiety is inseparable from intensifying US–China rivalry.

As Washington and Brussels coordinate on supply chain security, Asean risks being pulled into competing frameworks — some framed as “trusted supply chains”, others as industrial partnerships. Navigating this terrain requires Asean centrality not as rhetoric, but as policy.

Asean’s strength lies in collective leverage. Individually, Southeast Asian states are price takers. Collectively, they can shape norms on sustainable mining, processing standards, and long-term offtake agreements.

An Asean-level approach to critical minerals — akin to discussions on energy connectivity or digital economy frameworks — would enhance bargaining power and reduce vulnerability to coercion.

Europe’s predicament also challenges a long-held Asean assumption: that strategic ambiguity and economic openness are sufficient shields. Rare earths demonstrate that ambiguity without capability invites pressure.

If Asean aspires to strategic relevance — not alignment with any single power, but autonomy within a competitive system — it must invest in material foundations of power.

This does not mean militarisation. It means industrial foresight. It means treating critical minerals as strategic assets, not merely export commodities. It means coordinating industrial policy, education, and technology transfer across borders.

And it means recognising that the green transition itself is a site of geopolitical competition, not a post-political domain.

Europe is learning, painfully, that industrial decline cannot be reversed overnight. Asean still has time.

The region’s demographic vitality, resource endowment, and strategic location offer advantages Europe no longer enjoys. But time will not wait indefinitely.

In this sense, Europe’s desperate push for rare earths is a cautionary tale for Asean.

Power in the 21st Century is increasingly grounded in geology, metallurgy, and supply chain control. Those who ignore these fundamentals may remain prosperous for a while, but they will not be secure.

For Asean, the choice is stark. Either the region shapes its role in the critical minerals economy with foresight and coordination, or it risks becoming an arena where others compete for control.

Europe’s anxiety is not Europe’s problem alone. It is a mirror reflecting the future challenges of all medium-size powers in an age where sovereignty begins beneath the soil. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.