On May 26, India and the US signed a bilateral critical minerals framework; the same day, Quad unveiled a $20-billion initiative spanning mining, processing, and recycling of critical minerals. These join a growing list of recent US-India partnerships, including FORGE, Pax Silica, the bilateral TRUST, and the Strategic Mineral Recovery Initiative (SMRI). While the details of the India-US framework are not publicly available, the Quad countries jointly released a statement outlining key areas of cooperation.
The US is a minor direct consumer — accounting for less than 5% of global demand — for minerals such as cobalt, nickel, and rare earths. Its imports of components made using these elements are several orders of magnitude higher. India, too, is import-dependent in this sector. Its vast rare-earth reserves remain unexplored, and its processing capabilities are underdeveloped. The instinct to respond through international partnerships in a sector acutely prone to Beijing’s economic coercion is sound and pragmatic.
However, many of these partnerships are yet to translate into assured mineral flows, technology transfers, or capacity-building for processing and downstream manufacturing. These tangible outcomes will require work on five fronts.
First, China’s dominance in rare earths is rooted in subsidy-linked overcapacity that has driven out efficient producers elsewhere. Overcapacity is a structural feature of China’s investment-led model. Establishing alternative mine-to-magnet supply chains would require partner countries to combat this artificial price suppression through aggregate demand, long-term offtake guarantees, and coordinated price-risk mechanisms. That’s where the Quad initiative’s intent to mobilise “guarantees, loans, equity participation, insurance, subsidies, and offtake or other commercial arrangements” holds promise.
Second, not all critical minerals are equally critical and require different approaches to ensure supply resilience. Rare earth elements — vanadium and antimony, for instance — are used in small quantities and for highly specialised applications. Their low demand, combined with high-criticality use cases, makes China’s dominance an effective lever in the short-term.
Export controls on these items disproportionately hurt other countries more than they hurt China itself. Partner countries should work together to stockpile these minerals, as their alternative supply-building is notoriously unviable in the immediate term. In contrast, minerals with a wide range of commercial applications and that are required in larger quantities — such as copper — are harder to stockpile and need a steady supply from diversified sources to offset any short-term shocks.
The US’s $12-billion Project Vault initiative is aimed at stockpiling for US firms but is bound to be inefficient. It does not differentiate between mineral categories and is financially inadequate for major minerals. Further, it risks distorting the prices of minor minerals already needed in small quantities. Expanding the initiative to more countries will make stockpiling economically viable by increasing both the available capital pool and overall demand.
Third, stockpiling without value-added manufacturing will not achieve de-risking. China’s monopoly lies in the processing stage of the value chain. Opening new mines elsewhere will not sufficiently dent this without a proportionate scale-up of refining and magnet manufacturing capacity outside China. This would require joint research collaborations and partnerships that can help India move beyond being a consumer of final goods or an exporter of unprocessed ore.
For instance, India exports manganese ore in its raw form, the value of which would increase by three to ten times if it could refine it domestically to produce ferromanganese or manganese steel.
Additionally, breaking China’s chokehold on this sector would require not only investments in substitutes, such as using iron or manganese in place of cobalt for batteries, but also innovations and design improvements that make magnets rare-earth-free. While the current frameworks emphasise tech sharing, these efforts must be further strengthened.
Fourth, critical minerals differ from oil in that they can be recovered from their sources and reused. Recycling is often an underappreciated facet of mineral security, even though it enables a closed, insular loop from already available, friendshored products. Today, due to a poorly scaled collection network in most consumer economies and a genuinely limited amount of available feedstock, recycling can meet only a small percentage of overall demand. This necessitates pooling electronic waste and establishing joint recycling facilities to scale production as more products reach end-of-life over the next few decades. It is thus encouraging that Quad’s critical minerals initiative seeks to “promote innovation in critical minerals recovery from, and recycling of, e-waste and scrap materials among Quad partners.”
However, as seen in the case of lithium over the past few years, unusually low prices of Chinese primary production can disincentivise recycling — less than 3% of lithium’s global demand currently comes from recycling. Procurement policies with guaranteed price floors between partner countries would be essential for recycling facilities to survive any price crashes in commodity markets, and would be critical.
Finally, the framework should extend to resource-rich countries in Africa and Latin America, where both the US and India have signed several agreements. Combating China’s entrenched presence in these countries and its ability to commit long-term capital while nimbly navigating political risks requires coordination and blended-finance mechanisms that provide a political backstop for private enterprises. Ownership of these existing mines is particularly important because starting a new mine typically takes an average of 16 years from discovery to production, with anecdotal data suggesting even longer timelines in the US and India.
The many frameworks on critical minerals are vital for managing the inevitable China shock, in which low-priced minerals exported from China will make projects elsewhere uncompetitive. Tackling this scenario requires on-ground coordination between companies in like-minded countries across the entire critical mineral supply chain.
Shobhankita Reddy and Pranay Kotasthane work on the geopolitics of critical minerals at the Takshashila Institution, an independent centre for research and education in public policy. The views expressed are personal
