ADB launches financing facility to support development of critical mineral supply chains in Asia and the Pacific
The Asian Development Bank (ADB) has announced a new initiative to provide funding to build critical mineral supply chains in Asia and the Pacific in a move it hopes will help meet demand for clean energy and support the manufacturing of electric vehicles and batteries.
ADB's new financing facility aims to develop critical mineral supply chains in the Asia-Pacific regionADB
Launched in early May, ADB's Critical Minerals-to-Manufacturing Financing Partnership Facility is intended to enable the Asia-Pacific region beyond mining critical minerals into creating fully fledged supply chains to support "higher-value" industries such as processing, manufacturing and recycling.
“Critical minerals will shape the next industrial era,” said Masato Kanda, ABD president, at its annual meeting in Samarkand, Uzbekistan. “Asia and the Pacific should be more than a source of raw materials. The region should also capture the jobs, technology and value these minerals provide.”
ADB has said the facility will "help prepare projects, reform policies, and support public investment and private financing across critical minerals value chains".
Structure of the Critical Minerals-to-Manufacturing Financing Partnership Facility
The facility is made up of two parts: a grant window and a catalytic finance window.
The grand window will fund early project work including feasibility studies, environmental and social assessments, technical assistance and knowledge-sharing. This window has seen a commitment of $20 million from the government of Japan and $1.6 million from the UK government.
Designed to bring in co-financing and risk-sharing from other financing partners, the catalytic finance window has seen its first partners, Korea Eximbank and the Korean Trade Insurance Corporation (K-SURE), each sign a $500 million memorandum.
Additionally, ADB has worked with partners to establish a Critical Minerals Database to "improve information on critical minerals supply chains and support better policy coordination".
These initiatives build on ADB's existing efforts to "support responsible and sustainable critical minerals-to-manufacturing value chains across the region", including supporting battery manufacturing and recycling in India, geological data mapping in Mongolia, AI-driven critical metals production and circular approaches in Uzbekistan, a critical minerals strategy in Kazakhstan, and a critical minerals roadmap and regulatory reforms in the Philippines.
Intensifying efforts to secure critical mineral supply
In recent years, securing access to critical minerals has been a key concern for governments and supply chains around the world. In February, the US government held the Critical Minerals Ministerial – an event bringing together ministers from 54 countries to discuss the importance of critical minerals and a proposal, shared by US vice president JD Vance, for a "preferential trade zone for critical minerals".
Representatives of several governments in Asia attending the meeting, including from: India, Japan, the Republic of Korea, the Philippines, Singapore, Thailand and Uzbekistan. During the event, both the Philippines and Uzbekistan signed agreements with the US surrounding critical mineral supply chains. The two nations were amongst 11 that signed a critical mineral framework or Memorandum of Understanding (MoU) with the US over the course of the event in Washington, DC.
The Philippines' secretary of environment and natural resources Raphael Lotilla (left) and US under secretary of state for economic affairs Jacob Helberg (right) agreed a critical minerals MoU in FebruaryUS Embassy of the Philippines
According to the Embassy of the Philippines in the US, the MoU signed by the two countries provides a framework to support stable and resilient supply and value chains in critical minerals and rare earths in both countries. It affirms sustainable and responsible resource management, promotes fair markets, and supports local capacity building and domestic value addition and processing.
"The MoU underlines the need for financing and technical know-how to ensure environmental sustainability and the responsible mining of the Philippines’ critical minerals and rare earths – including their mapping and survey, and research and innovation in mining, processing, refining and recycling of the same,” commented Raphael P M Lotilla, secretary of environment and natural resources for the Philippines, after the MoU was agreed.
Meanwhile, the US and Uzbekistan signed a Joint Investment Framework, agreeing to cooperate and establish a new US-Uzbekistan Joint Investment Holding Company for future minerals and infrastructure projects.
Increasing demand for critical minerals
In its recent 'Risks and Opportunities for Critical Mineral Supply in ASEAN' report, the Economic Research Institute for ASEAN and East Asia (ERIA) noted that Southeast Asia is becoming one of the world’s most strategically important regions for EV battery minerals and manufacturing.
However, it reported that the supply chain remains fragile because production, refining and processing are heavily concentrated in a handful of countries and exposed to policy, geopolitical and price shocks.
It recognised a shift in the region – particularly in countries such as Indonesia, Thailand and Malaysia – repositioning from raw material suppliers to EV and battery manufacturing hubs. The ERIA warned that global demand for batteries will increase pressure on nickel output from the Philippines.
The report identified EV demand growth as the primary long-term demand driver for several critical materials needed for EV manufacturing, including: nickel, lithium, cobalt, graphite, manganese and copper. As well as pressure from outside the region, ASEAN’s own EV manufacturing expansion is expected to intensify regional demand pressure.
