By Noel B. Lazaro and Reeno E. Febrero
There are moments in geopolitics when the choreography matters less than the quiet exchanges behind it. In late October in Busan, on the sidelines of the Asia-Pacific Economic Cooperation summit, Donald Trump and Xi Jinping staged one of those scenes: a handshake, a photo-op, and a declaration that the rare-earths dispute was “settled.” In reality, the settlement was transactional. Washington agreed to ease a tranche of tariffs and reopen the door to large U.S. soybean shipments to China, while Beijing pledged a one-year pause on its threatened export restrictions on rare-earth minerals and magnets to the United States. Markets exhaled. Analysts sifted through tone and subtext. But the real story—the underlying logic of power at play—remained unchanged. The agreement did not reorder the world; it merely clarified the minerals that now anchor it.
For a century, great-power politics pivoted on barrels of oil. Then, at the height of the digital boom, it seemed the future would be written in bytes. But the energy transition—and the militarization of supply chains—have rearranged the hierarchy. The building blocks of modern life are no longer fossil fuels or data streams but the atoms embedded in things: lithium in batteries, cobalt in electronics, neodymium in magnets, gallium in chips. The periodic table has become a map of twenty-first-century geopolitical anxiety.
The world according to minerals
Rare earth elements—17 metals with names that sound like they belong to speculative fiction—are geologically abundant but industrially elusive. They rarely occur in high concentrations, and separating them from ore requires complex, hazardous processing. This is why the world’s dependence on China is not an accident but the result of decades of strategic investment.
Today, China mines about 70 percent of global rare earths, refines over 90 percent, and manufactures nearly all high-performance magnets, the essential cores of electric vehicles, wind turbines, and precision-guided weapons. In 2024, it exported 58,000 tonnes of magnets—a volume not just of trade but of leverage.
Even when Beijing loosened export licenses earlier this year, it did so after demonstrating a simple lesson: it can constrict supply at will. Goldman Sachs estimates that diversifying refining capacity will require a decade of massive capital outlay, assuming geopolitical conditions remain stable—which they will not.
The Busan announcement, then, was a strategic feint. A temporary pause is not a policy shift; it is a warning shot. Scholars call this “deterrence by demonstration”: wield the weapon once, then sheath it. The world will remember who holds the handle.
The global scramble to escape gravity
In Washington, the truce buys time for the Pentagon’s magnet stockpile and for chipmakers to secure alternative sources. In Brussels, it reinforces the urgency behind the EU Critical Raw Materials Act, which limits reliance on any single supplier to 65 percent. Canada has launched a Critical Minerals Alliance. Japan quietly expanded its Strategic Metals Reserve. The G7 is building buffers, offtake contracts, and recycling mandates.
Yet progress is uneven. According to the International Energy Agency, global demand for critical minerals will triple by 2040; demand for rare earths used in EV motors could grow sevenfold. But outside China, refining capacity is thin, fragmented, and vulnerable to political risk. The United States may have copper, but it lacks separation plants. Australia excels at mining but not processing. Europe has technology but few deposits.
“Security of supply,” once a term of art, has become the central preoccupation of ministries and militaries.
A Philippine story hiding in plain sight
The Philippines is rarely mentioned in rare-earths analyses—yet it should be. The archipelago sits atop one of the world’s richest mineral belts, including nickel, cobalt, and copper, the backbone metals of the energy transition. Geological surveys have also identified rare earth occurrences in Palawan and Nueva Vizcaya, comparable in concentration to deposits in China and the United States.
In 2024, the country produced ₱94 billion in nickel despite global price softness. But the economic story is incomplete. The Philippines exports raw ore—low value, high volume. The higher-order value, the conversion of ore into materials and components, continues to accrue to other economies. Only two hydrometallurgical processing plants operate nationwide—Taganito and Coral Bay—with a third planned in Leyte.
The result is a familiar trap: a resource-rich nation earning the smallest share of value.
A sector meeting its inflection point
In September 2025, a Philippine Mining Club luncheon on “green mining technologies” set the tone. There, Department of Science and Technology (DOST) Undersecretary Sancho A. Mabborang underscored that under the Harmonized National R&D Agenda 2022–2028, DOST has earmarked about ₱300 million for a critical minerals R&D roadmap for 2026–2028, with the long-term goal of positioning the Philippines as a hub for critical minerals and green technology applications, especially for electric vehicles.
A month after, at the Mining Philippines 2025 conference in Taguig, the conversation widened from laboratories to innovation. Speaking at a plenary session, Department of Environment and Natural Resources (DENR) Undersecretary Carlos Primo David explained that new regulations and the auctioning of idle mineral assets aim to lift mining’s share of GDP from about 0.5 percent to roughly 2 percent and revive long-stalled tenements.
By November 21, at the StratBase ADR Institute’s Pilipinas Conference in Makati, the agenda had become explicitly strategic. DENR Secretary Raphael Lotilla announced that the agency is finalizing an executive order to establish a national framework for developing a critical minerals industry, stressing that “the goal is not simply to mine more, but to mine better, process smarter, and govern with integrity” so that the Philippines becomes a reliable contributor to the clean-energy transition.
In substance, that framework rests on three pillars: responsible exploration and extraction aligned with modern ESG standards; downstream processing and circular value chains that reduce dependence on ore exports; and domestic manufacturing that links minerals to industries—batteries, electronics, renewable energy, and defense. Lotilla has also signaled that environmental safeguards will be modernized to keep pace with innovation, climate realities, and market demand, a quiet rebuke to past eras when rules were either weakened or ignored.
Laws are evolving, but the challenge is coherence
Legal reforms point in the right direction. The Philippine Mining Fiscal Regime secures a fairer return for the State, the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act directs incentives toward value-added processing, and the amended Investors’ Lease Act lengthens leases for foreign investors to support more sustained investment.
But these instruments need to hold together. Policy remains siloed. Agencies pull in different directions. The DENR cannot build a critical-minerals industry without synchronized work from the Departments of Trade, Science and Technology, Energy, Foreign Affairs, and, increasingly, Defense.
The reality is stark: China’s advantage is not mineral abundance but metallurgical mastery. If the Philippines desires a place in the global value chain, it must build capacity not just to extract but to transform.
ASEAN’s moment—and a door for the Philippines
The geopolitics of minerals is shifting toward Southeast Asia. ASEAN produces nearly half the world’s nickel and over a third of its tin. Indonesia has used export bans to force domestic processing, with significant success. Vietnam is entering the magnet industry. Malaysia and Thailand house advanced electronics clusters. The region is becoming a manufacturing basin searching for secure inputs.
The Philippines could be the bridge: a mining powerhouse on the supply side, linked geographically and economically to manufacturing hubs.
The U.S.-led Minerals Security Partnership is looking for “second-source” jurisdictions—reliable alternatives to China. Regional manufacturers—from Japan to South Korea—seek diversified supply chains anchored in ESG compliance.
Recognizing the fluidity of global supply chains, the StratBase ADR Institute observes that Manila could strengthen its position by securing a long-term commitment from Washington, ensuring relevance within the U.S.-led critical-minerals network.
But they will only invest where institutions are predictable.
Material power in a fragile age
The deeper lesson of the Busan truce is that geopolitical rivalry is now embedded in the stuff of things. Nations that control the minerals and manufacturing of the energy transition will shape the century that follows.
But the world also faces a paradox: the clean-energy future requires extracting more minerals, not fewer. Each electric vehicle needs six times more mineral input than a combustion car; each offshore wind turbine needs nine times more rare earths than its fossil-fuel equivalents. The green transition is, in this sense, a mining story.
This raises a fundamental question for resource-rich democracies like the Philippines: will we remain exporters of the past or architects of the future?
To choose the latter will require industrial policy, environmental credibility, social legitimacy, and geopolitical clarity—an alignment of institutions rarely attempted, let alone sustained.
The rarest resource of all
When Trump and Xi posed for cameras in Busan, it was easy to imagine a world on pause. But the clock did not stop. Demand for critical minerals continues to rise. Refining bottlenecks grow sharper. The energy transition accelerates, even as geopolitical tension thickens.
Beneath our feet lie minerals that could define—not merely enrich—the country. They will not wait for us to decide.
In a century shaped by materials more strategic than oil and more enduring than currency, foresight is the rarest resource of all.
Noel B. Lazaro and Reeno E. Febrero serve with Global Ferronickel Holdings, Inc. They were recognized at the 2025 Asian Legal Business Philippine Law Awards as finalist for In-House Counsel of the Year and winner of Young In-House Counsel of the Year, respectively. They teach law and write opinion columns.
