The Human and Environmental Costs of Critical Mineral Mining

There are growing concerns over the negative social and environmental impacts of critical mineral mining in countries such as Thailand and Malaysia following their signing of memorandums of understanding (MOUs) for such mining with the US in October 2025. While these concerns are justified, it should be noted that MOUs are not legally binding and that it takes an average of 15.5 to 20 years to set up a new mine. This means that there is still time to reflect on Southeast Asia’s critical mineral strategies.

Critical minerals are essential components used in renewable energy technologies, as well as defence and electronic equipment. At present, China holds large reserves and has global dominance over the production (mining and refining) of many critical minerals. As the US and other countries seek to diversify global critical mineral supply chains, several Southeast Asian countries have tried to make the most of these economic opportunities.

According to the International Energy Agency (IEA), Indonesia and the Philippines are major producers of nickel and cobalt (72 and 14 per cent of global output, respectively), while Myanmar is only second to China in the production of rare earth elements. Significant but unutilised deposits of rare earths can also be found in Thailand and Vietnam. After 2004, China began to regulate its mining industry, imposing stricter environmental laws. As a result, many rare earth mining operators moved to weakly regulated areas in Myanmar and Laos.

The mining and processing of critical minerals creates jobs and export opportunities, but Southeast Asians also have to bear the resulting heavy human and environmental costs. Apart from raising land grab concerns, critical mineral mining in Indonesia, Malaysia, and the Philippines has resulted in deforestation and water and air pollution, which in turn have undermined people’s health, biodiversity, farming, fisheries, and ecotourism. These countries have passed laws to regulate the mining industry and protect the environment, but weak enforcement means that such problems persist. A study published in 2024 found that, between 2011 and 2018, deforestation doubled in nickel-mining areas compared to non-mining areas in Sulawesi, Indonesia. At least 80,000 hectares of forest lands in Indonesia have been lost to nickel mining, and another 500,000 hectares of forests are at risk.

If sustainable mining of critical minerals is not possible … Southeast Asian countries should delay approving new mining projects and, instead, urgently develop the circular economy of critical minerals.

Rare earth mining in Myanmar’s Shan state has caused toxic heavy metal and chemical run-off into rivers, which affects not just Myanmar but also neighbouring Thailand. Dangerous levels of arsenic have been found in the Kok, Sai, and Ruak rivers, and aquatic species from these rivers have been declared unsafe for consumption by the Thai government. Many Thai villages rely solely on water from the Kok River for consumption and farming, and consequently struggle to find alternative sources of safe water. One estimate suggests that the contamination has cost Chiang Rai communities as much as 1.3 billion baht (US$40 million) annually in economic losses that include losses to the fishery and tourism sectors. Similarly, rare earth mines in Laos have contaminated river systems that flow into Vietnam. Mining activities in southern Laos could also contaminate Cambodia’s Tonle Sap Lake – the main source of animal-based protein intakes for Cambodians – causing dire health and food security consequences. 

Academic discussions on critical mineral strategies in Southeast Asia point to the potential benefits arising from increased regional cooperation and investment to develop critical mineral supply chains and reduce the region’s reliance on Chinese capital. ASEAN also recently announced the new Minerals Cooperation Action Plan (AMCAP-IV), which aims to promote regional cooperation in sustainable mining. Such ambitious goals are difficult to achieve, given ASEAN member states’ preference for adhering to their own national plans. In this regard, the least that ASEAN member states can do is to collectively tackle transboundary pollution caused by the mining of critical minerals, especially toxins in water sources that undermine people’s health and food security. In addition to stricter socio-environmental regulation of the mining sector, enforcement capabilities in each ASEAN member state need to be strengthened.

Most importantly, ASEAN should call on China to implement extraterritorial measures to prevent its companies from engaging in unsustainable mining practices in Southeast Asia. To protect its reputation, China should show a serious commitment to promoting sustainable and traceable critical mineral supply chains and hold Chinese-linked companies operating in the region to account for irresponsible mining activities.

If sustainable mining of critical minerals is not possible in the foreseeable future, given current technologies, Southeast Asian countries should delay approving new mining projects and, instead, urgently develop the circular economy of critical minerals, that is, reducing, reusing, and recycling critical minerals. The IEA estimates that the demand for critical minerals could quadruple by 2040 due to global decarbonisation efforts. Recycling, however, could significantly reduce the pressure to develop new mines.

Since Southeast Asians are paying high human and environmental costs to produce critical minerals, these minerals should be used to promote energy transition and sustainable development in the region as far as possible. To this end, Southeast Asia should seek transnational partnerships that help to develop the circular economy of critical minerals, sustainable mining, and green technologies that will benefit all in the region.

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