Critical minerals are the building blocks of modern civilization. They underpin every sector of the global economy: semiconductors, electronics, automobiles and defense equipment, and have given rise to what Gregory Wischer, an official at the U.S. Department of the Interior, calls “Mineral Power.” From AI and quantum computing to biotechnology, blockchain, robotics, EVs and satellite technology, their seamless integration into industrial, economic, military and technological systems elevates them into a strategic class of assets unmatched in importance.

No country has strategized the critical minerals domain as effectively as China. While the groundwork began with the 863 Program, a decisive push came with the 973 Program in the 1990s. Beijing’s industrial policy has since relentlessly targeted the sector. Former leader Deng Xiaoping declared in 1992, “The Middle East has oil, China has rare earths.”

Today, that vision is reality. China holds a near-monopoly in refining and processing key minerals such as lithium, cobalt, nickel, gallium, germanium, antimony and graphite, and dominates rare earths like terbium, neodymium, dysprosium, and praseodymium. It controls more than 60% of rare earth mining, over 85% of processing, and around 90% of magnet production worldwide. Between 1950 and 2020, China registered around 25,000 rare earth patents, far outpacing the U.S. tally of about 10,000.

China has not hesitated to weaponize its mineral power. When the Trump administration imposed tariffs, Beijing swiftly curbed exports of samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, reminding Washington of its dependence. China’s export controls were also felt in India, particularly in the automobile sector. Since then, India has acted to secure its critical mineral needs, engaging both domestic stakeholders and international partners.

In June 2023, India’s Ministry of Mines found near-total import dependence in some of the 69 critical minerals it earmarked. It launched its National Critical Mineral Mission to address the issue, with 1,200 exploration projects planned over the next five years.

To further the momentum, Prime Minister Narendra Modi this year embarked on a week-long mineral tour to Ghana, Trinidad & Tobago, Argentina, Brazil and Namibia. India will undertake joint exploration and extraction projects with Ghana, while a 2024 pact between an Indian state-owned company and an Argentine enterprise will be operationalized for lithium exploration. With Namibia, where India already has $800 million in investments, talks advanced toward deeper cooperation in mining and value addition in critical minerals like cobalt and lithium.

The Quad partners (India, Japan, Australia and the U.S.) launched their Critical Minerals Initiative in July, aiming to bolster supply chain resilience in this strategically vital sector. India has also reopened channels with China after a five-year border standoff. China eased restrictions on rare earth exports to India after Foreign Minister Wang Yi’s visit to New Delhi last month.

India’s measures are unfolding alongside a global awakening to the vulnerabilities of mineral dependence. The U.S., Australia and Japan, after their own confrontations with Chinese leverage, have taken measures to diversify supply chains. Washington has tied minerals to security, Canberra is leveraging its resource base and Tokyo has institutionalized gradual resilience.

The Trump administration placed critical minerals at the center of its Ukraine policy, pressing Kyiv to commit its mineral resources in exchange for security guarantees. A deal was also struck with Indonesia for lifting export restrictions on nickel, which was a key source for China. In Africa, President Donald Trump helped to mediate a peace agreement between the Democratic Republic of Congo and Rwanda, which reportedly opened access for U.S. companies to Congolese mineral reserves.

Australia is richly endowed with critical mineral resources and has historically maintained a more robust base for mining and processing. In recent years, it has moved to close supply chain gaps by deepening partnerships with the U.S. The Pentagon concluded a 10-year agreement with MP Materials, an American mineral giant, for rare earth magnets, at nearly twice the price of Chinese suppliers. The deal is reminiscent of Japan’s 2010 intervention to rescue Australian mining giant Lynas through guaranteed offtake agreements and capital infusions. More recently, Apple committed $500 million in a similar offtake arrangement, underscoring Big Tech’s growing stake in securing access to critical minerals.

Japan learned its lessons well before others. Following a territorial dispute over the Senkaku Islands in 2010, China imposed a rare earth embargo. Tokyo responded swiftly, allocating a supplemental budget of $1.2 billion and unveiling a comprehensive strategy. This included investments in technologies to reduce rare-earth dependence, developing alternatives and recycling technologies, expanding equity and loan guarantees in Australian projects, and building strategic stockpiles. These efforts cut Japan’s dependence on China from about 90% to 60%, according to the World Economic Forum. Yet, the scale of China’s dominance is such that even a sustained decade-long policy push has not reduced it further. What distinguishes Japan, however, is unmatched policy expertise in effectively diversifying mineral supply chains — something others struggle to replicate.

To mitigate the risks of Chinese dominance in the critical minerals sector, the Quad partners, especially India, Japan and Australia, must coordinate closely. The objective is not to antagonize China outright but to dilute its leverage by diversifying supply chains to the point where coercion loses its sting. This strategy can be advanced through four key measures.

First, secure mining rights across the spectrum of critical minerals. This demands deft diplomacy, as China’s first-mover advantage is formidable. Given America’s penchant for coercive diplomacy, Japan and India are better placed for the task. New Delhi’s goodwill in Africa, created by providing COVID vaccines and digital finance infrastructure in particular, offers unique opportunities.

Second, invest in research and development for refining and processing. China’s dominance is rooted not only in mining but in mastery of these technologies.

Third, mount a coordinated regulatory push against dumping. State-backed Chinese entities have systematically undercut private competitors, making it impossible to sustain market entry without joint action.

Fourth, build a robust subsidy architecture within the countries, from capital infusions and guaranteed offtake agreements to stockpiling reserves that can buffer supply shocks.

By combining diplomacy, research and development, regulatory measures and robust investment guarantees, India and its Indo-Pacific partners can diversify supply chains, reduce dependence and safeguard global industrial and defense systems. The race for mineral resilience is no longer optional; it is a strategic imperative.