Masato Kanda, president of the Asian Development Bank, made an observation in Samarkand last week that cuts to the heart of why this matters: 'Critical minerals will shape the next industrial era. 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.' On May 3, the ADB formally launched its Critical Minerals-to-Manufacturing Financing Partnership Facility, backed by $20 million from Japan, $1.6 million from the UK, and $500 million MOUs from both South Korea's Eximbank and K-SURE. It is the first multilateral development bank vehicle purpose-built to finance processing, refining, and advanced manufacturing across critical minerals value chains in Asia and the Pacific. This is not about mining. It is about controlling what happens after the ore comes out of the ground.
The landscape here has been defined by a single fact for nearly two decades: China refines or processes the vast majority of the world's cobalt, lithium, nickel, graphite, and rare earth elements. China controls roughly 80 percent of global rare earth processing capacity and more than 60 percent of cobalt refining. India, Mongolia, the Philippines, Australia, and Indonesia sit on massive ore deposits and export them raw or barely processed, capturing 10 to 20 percent of the final value while China and its processors take the bulk. The ADB facility is designed to break that chain by financing the midstream infrastructure, smelters, refineries, cathode plants, alloy facilities, that have historically been capital-intensive and politically risky for developing economies to build alone. Japan's $20 million grant and Korea's $500 million commitment signal that allied powers see this as a strategic economic priority. The Australia-Japan bilateral agreement signed the same week, pledging A$1.67 billion ($930 million USD) for critical minerals cooperation, reinforces the same logic: democracies are coordinating to build alternative supply infrastructure.
The facility operates in two windows. The grant window, seeded by Japan and the UK, will fund early-stage project work: feasibility studies, environmental and social assessments, technical assistance, policy reform, and geological mapping. South Korea's catalytic finance commitments, backed by Eximbank and K-SURE, will fund actual construction and equipment. The target minerals are cobalt, copper, graphite, lithium, nickel, and rare earth elements. The active project pipeline already names four geographies: battery manufacturing and recycling in India, geological mapping in Mongolia, and policy and regulatory support in the Philippines and Kazakhstan. These are not speculative. India's cathode production capacity is expanding rapidly; Mongolia holds roughly 6 percent of global rare earth reserves; the Philippines hosts nickel deposits that rival Indonesia's. The facility is designed to finance projects that exist and that countries are ready to build.
The timing is driven by four convergent pressures. First, the electric vehicle and battery boom has created immediate, durable demand for lithium, cobalt, and nickel refining capacity. Second, the U.S. CHIPS and Science Act and the Inflation Reduction Act have created $400 billion in subsidies for domestic semiconductor and battery manufacturing, most of which require secure minerals supply. Third, China has signaled willingness to restrict critical minerals exports as a leverage tool, most visibly by cutting rare earth shipments to Japan in the 2010s and by controlling cobalt refining capacity during trade disputes. Fourth, the Indo-Pacific Quad (Australia, India, Japan, United States) and the emerging U.S.-EU critical minerals partnership have made supply chain resilience a stated geopolitical priority. The ADB facility is the first institutional lever to finance that shift at scale.
Who benefits is clear: India, Mongolia, the Philippines, and Kazakhstan gain access to capital for midstream infrastructure they would struggle to finance themselves, capturing value that has historically flowed to China. South Korea gains optionality, it is the world's second-largest battery manufacturer and has been vulnerable to cobalt and nickel supply shocks from Chinese-controlled refineries. Japan gains the same optionality plus geopolitical alignment with Australia and India. Who does not benefit: Chinese smelters and refiners that have relied on Asia-Pacific ore at discount rates to be processed and re-exported globally. They will face new competitors with secured capital and aligned host governments. This is not a marginal story about supply chain optimization. This is about shifting who owns the processing infrastructure that controls what gets made where.
Watch three metrics over the next 18 months. First, whether the Korea Eximbank and K-SURE $500 million MOUs convert into actual committed loans for named projects, MOUs are not deployed capital, and many such commitments languish unsigned. Second, the speed and scale of project preparation completions; the grant window has identified specific geographies, but the facility needs to move feasibility studies and policy reforms into shovel-ready status. Third, whether U.S. and European actors contribute capital or policy alignment that amplifies the ADB facility, signaling that this is a coordinated democracies strategy or a regionally fragmented play. If Korea and the ADB mobilize $1 billion for processing capacity in India and Mongolia by 2028, the geometry of critical minerals power shifts. If the MOUs expire undeployed and project preparation stalls, the facility becomes a geopolitical signal without economic substance.