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The Quad7 July 2026

Operationalising the Quad Critical Minerals Initiative

Aerial view of salt ponds
Report by
Hayley Channer, Director of the Economic Security Program with the United States Studies Centre at the University of Sydney.

Hayley Channer

Director, Economic SecurityUnited States Studies Centre
Robert Monterosso

Robert Monterosso

Research Fellow, Economic SecurityUnited States Studies Centre

About this report

The United States Studies Centre (USSC) at the University of Sydney, in partnership with the US Department of State, is convening two expert workshops in 2026 on how the United States, Japan, India and Australia can operationalise the 2025 Quad Critical Minerals Initiative and May 2026 framework agreement. The first of these events was held in February 2026 at the USSC. This report outlines the expert views expressed at that workshop and provides policy options for the Quad governments to consider. The second workshop is scheduled for October 2026, with the final outcomes report due in January 2027.

Executive summary

Securing critical minerals supply chains is one of the defining elements of global strategic competition. National security, the clean energy transition, artificial intelligence (AI) and advanced manufacturing are all dependent on secure critical minerals supply. Currently, China dominates crucial chokepoints in many critical minerals supply chains and has used this dominance to further Chinese statecraft by restricting access to key processed materials.

In response, the United States and its allies and partners are forging new agreements and stepping up their industrial policy efforts to create a secure, ex-China critical minerals supply. As part of this, the Quad, a diplomatic and security partnership between Australia, the United States, Japan and India, introduced a Critical Minerals Initiative (CMI) in July 2025.1

Launched by Quad Foreign Ministers, the CMI builds on the Quad’s goals of strengthening economic security and collective resilience by collaborating on securing and diversifying critical minerals supply chains. In May 2026, Quad members built on the CMI by announcing a framework for cooperation on critical minerals. This included a commitment to mobilise up to US$20 billion in government and private sector capital towards critical minerals projects across the Quad countries.2

At their heart, these agreements recognise two core issues:

  • Each of the Quad members is vulnerable to chokepoints in critical minerals supply chains.
  • There is significant scope for Quad members to leverage their respective comparative advantages to do more mining, processing and manufacturing of critical minerals.
Indian External Affairs Minister Subrahmanyam Jaishankar, Australia's Foreign Minister Penny Wong, Japanese Foreign Minister Takeshi Iwaya and US Secretary of State Marco Rubio at a press conference in Washington, DC, July 2025.
Source: Getty

The challenge ahead

The Quad countries, and indeed all countries seeking to diversify their critical minerals supply chains, must be clear-eyed about the challenges in front of them. As the Quad and its strategic partners commit billions in funding, consider price floors and form diplomatic networks, China and other dominant producers will attempt to maintain their market position.

This is to be expected. In the same way the United States is working to maintain its technological advantages, which have been built up over years, China is attempting to maintain its advantages in critical minerals through a mix of export controls, domestic subsidies and outward investment in overseas mining operations.

To overcome this challenge, there are a series of ‘fronts’ on which the Quad will need to concentrate its efforts:

  • The commercial front: Setting up critical minerals mining and processing facilities is capital-intensive, and commercial returns can be limited and risky. Dominant producers have enough market power to keep prices artificially low, putting significant pressure on the commercial viability of other producers.
  • The technological front: Critical minerals processing and downstream manufacturing are complex, advanced industrial activities. To produce critical minerals at scale without compromising environmental standards, the Quad needs to leverage the latest technologies and train a skilled workforce to operate these facilities. However, China owns the patents (IP) for many leading processing techniques and manufacturing equipment and is restricting IP access to Quad countries and their companies.
  • The coordination front: Even if the commercial and technological challenges can be mediated, building production capacity comes with lengthy and complex approval timelines, making coordination across each point in the supply chain difficult. This makes it challenging to compete with vertically integrated supply chains of dominant producers.

Figure 1 outlines the challenges associated with each of these fronts, what the Quad could look to achieve to mitigate the challenge and the tools available to do so. Importantly, each of the fronts is interrelated — action across all three is necessary to unlock secure critical minerals supply chains.

Figure 1. The three fronts of the critical minerals challenge, the Quad’s objectives on each front and the tools available

Figure 1. The three fronts of the critical minerals challenge, the Quad’s objectives on each front and the tools available [Image]

Options for Quad cooperation

Acknowledging these challenges, a number of policy options were identified to support the Quad to diversify its mineral supply chains. These options are presented across two subsets:

Force multipliers: low-cost, quick-win options that make progress across one or more of the fronts described above.

Supplementary options: a mix of immediate and longer-term priorities that were broadly acknowledged during the roundtable as being key to unlocking critical minerals supply.

These policy options are summarised in the table below, and further details are provided in the body of the report.

Table 1. An overview of the potential policy options available to the Quad to unlock secure critical minerals supply chains

DownloadOperationalising the Quad Critical Minerals Initiative

A shared imperative to act

The Quad has a clear, shared imperative to act on securing critical minerals supply to meet its collective goals of economic prosperity and national security. The Quad members are each dependent on a single producer for many critical minerals and possess the economic complementarities needed to build new critical minerals supply chains.

The Quad was created in 2004 to coordinate humanitarian relief between the United States, Australia, Japan and India after the devastating Indian Ocean tsunami and earthquake. In 2007, the Quad was formalised as a diplomatic and security dialogue focused around joint naval exercises and promoting open sea lanes. After a hiatus from 2008, the Quad reformed in 2017 in the face of greater Indo-Pacific strategic contestation and was elevated to a leader-level dialogue in 2021. Since then, the Quad has both deepened and broadened its collaboration across a range of shared interests. In particular, the 2025 Quad Foreign Ministers’ Meeting established a joint agenda focused on four key areas:

  1. Maritime and transnational security
  2. Economic prosperity and security (including the Critical Minerals Initiative)
  3. Critical and emerging technology
  4. Humanitarian assistance and emergency response

Critical minerals are essential to the industries that support economic prosperity, technological growth and national security, including telecommunications, defence, aerospace and advanced AI. Several of the Quad’s shared priorities are dependent on these industries. Currently, China dominates the processing of many critical minerals such as graphite, gallium, rare earths, cobalt and lithium. On multiple occasions, China has leveraged its position in critical minerals markets to exert influence over Quad members. A key example is in 2024 when China implemented strict export controls on rare earth elements, including magnets and separation technologies.

Acknowledging the global chokepoint in critical minerals, the Quad launched the Critical Minerals Initiative (CMI) in July 2025. The CMI seeks to build supply chain resilience by increasing communication and coordination between both public and private sectors to diversify critical minerals supply chains.

Building on this, Quad members announced a joint framework in May 2026, which included objectives to mobilise up to US$20 billion in government and private sector capital towards unlocking critical minerals supply. This framework has three core pillars:

  1. Investment and project development— identifying and supporting strategic critical minerals projects with a Quad nexus, such as those located in Quad partner countries or supply Quad markets
  2. Regulatory alignment and overall environment — improving the overall environment for critical minerals development, including good practices on permitting and regulatory processes, cooperating on technology development and considering the feasibility of coordinated measures to address non-market practices.
  3. Recycling and recovery of critical minerals — collaborating on technology development and innovation to boost secondary production of critical minerals from e-waste and other scrap materials.3

These initiatives build on existing policies being pursued by each Quad member, including critical minerals stockpiling, direct government investment and a raft of agreements signed with like-minded partners.

As a collective, the Quad members have the economic strengths and complementarities to build diversify critical mineral supply chains. This is evident in existing Quad supply chains. The only complete mine-to-magnet heavy rare earths supply chain outside of China is between Australia and Japan through Lynas. India and Japan are also working to set up a second supply chain through Indian state-owned IREL. Australia, Japan and the United States have recently partnered on a joint gallium recovery project in Australia, with offtake to Japan. Each of the Quad members can play a key role in the critical minerals supply chain.

To diversify critical minerals supply, Quad members must coordinate and cooperate with each other. In isolation, none of the Quad members can compete with China’s combination of abundant mineral resources, low-cost labour and energy, technological know-how and end-use demand. China’s industrial advantages and willingness to subsidise domestic producers to maintain its supply chain dominance mean that the Quad countries must work together.

The Quad shares some critical minerals vulnerabilities

Critical minerals are crucial to Quad countries’ economic and national security, and they have unique properties that make them difficult to substitute. Figure 2 shows that China dominates 19 out of 20 critical minerals supply chains required to support economic prosperity, the renewable energy transition and modern defence systems.4

Figure 2. Share of global minerals processing capacity (%)

China dominates the global processing of critical minerals which are key inputs to important technologies like semiconductors, batteries and defence applications

These supply chain vulnerabilities are clear in the Quad’s imports of critical minerals and key technologies such as lithium-ion batteries and permanent magnets, shown in Figure 3. Across these key critical minerals and midstream technologies, Quad countries source between 55% and 80% of total imports from China. These vulnerabilities also extend to concentration in Quad countries’ critical minerals export markets, particularly for high-volume mining countries like Australia. Currently, Australia exports 95% of its total lithium to China, presenting a major vulnerability if trade were disrupted.5 Put simply, China’s dominance of critical minerals supply chains — as both a supplier and purchaser — places each of the Quad members at risk of trade disruptions.

Figure 3. Share of Quad imports for key critical minerals and technologies by country, 2024
Each of the Quad members is dependent on China for a significant portion of its imports. China is the largest supplier of key critical minerals to the Quad

A shared imperative to act: Perspectives from roundtable participants

  • Private sector actors across the Quad countries have experienced some form of economic pressure through China’s weaponisation of its supply chain dominance, stretching back to 2010.
  • Quad countries have recognised this risk and introduced a range of policies and programs targeted at securing critical mineral supplies. This includes concessional financing, stockpiling and price floors. These policies represent billions of dollars of government support across the Quad.
  • There are natural economic complementarities between the Quad members which presents an opportunity to build secure critical minerals supply chains. These economic strengths span the length of the supply chain, from mining and processing, through to manufacturing and final demand.

If these dependencies were exploited, this could seriously constrain the Quad’s ability to maintain economic stability and national security. This is compounded by a massive increase in global demand for mineral-intensive renewable energy and defence technologies. Put simply, some of the Quad’s shared objectives could be at risk unless more critical minerals supply comes online.

Already, broader supply chain pressures and costs are placing strain on Quad members’ defence industrial bases. The United States’ production of key defence assets, ranging from Tomahawk missiles to nuclear-powered submarines, is well below what is required to meet domestic and international demand.6

The recent conflict in Iran has highlighted the importance of secure critical minerals supply — in just the first 36 hours of the conflict, the United States expended munitions containing almost 100 kg of rare earth elements, 5 kg of gallium and over 11 tonnes of tungsten.

Each of these assets requires advanced technologies, many of which cannot be produced without critical mineral inputs. The recent conflict in Iran has highlighted the importance of secure critical minerals supply — in just the first 36 hours of the conflict, the United States expended munitions containing almost 100 kg of rare earth elements, 5 kg of gallium and over 11 tonnes of tungsten.7 Efforts to replenish these munitions are unlikely to keep pace with demand.

Many of these critical minerals are currently subject to export controls by dominant producers. Figure 4 shows some of the key critical minerals consumed after more than 3,000 munitions and interceptors were expended in the first 36 hours of this campaign. Almost all minerals are subject to export controls, indicated with red highlight.

Without a secure and diversified critical minerals supply chain, the Quad could be constrained in their ability to procure, maintain and repair defence assets.

Figure 4. US-Israeli consumption of munitions and critical minerals in the first 36 hours of the Iran conflict
More than 3,000 precision-guided munitions and interceptors were expended in the first 36 hours​

Figure 4. US-Israeli consumption of munitions and critical minerals in the first 36 hours of the Iran conflict
Source: Payne Institute for Public Policy; USSC analysis

Critical minerals as a tool for economic coercion

Critical minerals supply chains are becoming increasingly weaponised for geopolitical purposes. Over the past few years, some major producers, particularly China, have repeatedly restricted critical minerals supply to the United States and its allies to pursue foreign policy objectives. Each of the Quad members has faced economic coercion through China’s position in critical minerals and commodity markets. Table 2 provides examples of this.

Table 2. Examples of China leveraging its critical minerals dominance to coerce the Quad countries

Each of these case studies demonstrates Quad members’ reliance on China, either for raw material imports or exports, and China’s willingness to use its dominance of key supply chains to coerce countries to align with Beijing’s policy objectives. As long as these vulnerabilities persist, they can be exploited.

China’s rare earths export controls expected to intensify

China’s economic coercion through rare earths may intensify in November 2026, when major export controls on rare earths and battery supply chains are scheduled to be reintroduced.18 If this occurs, China’s supply of critical minerals to the world will become more restricted and centrally controlled.

These export controls on rare earths and battery supply chains would extend existing licensing requirements beyond raw materials to include components, technologies and even foreign-made products containing Chinese inputs.

Under the latest restrictions outlined by China’s Ministry of Commerce, any domestic or foreign-produced item is subject to these export controls if it contains certain rare earth elements sourced from China representing at least 0.1% of the item’s total value.19 It also extends these restrictions to any products manufactured outside of China using Chinese rare earth mining, separation, magnet manufacturing or recycling technology.

The extraterritorial nature of these export controls means that overseas entities, particularly manufacturers of permanent magnets, semiconductors, defence technologies and electric vehicles, will require licenses from the Chinese Ministry of Commerce.

For the United States and its partners, the implications of this are twofold. In the short term, licensing delays or denials could disrupt production and raise costs across strategic industries. The International Energy Agency estimates that these restrictions could put up to US$6.5 trillion per year of production at risk.20

Over the longer term, the restrictions risk entrenching China’s position by slowing efforts to diversify supply chains, particularly by limiting access to the equipment and technologies needed to build alternative capacity.

The three fronts of the critical minerals challenge

It is clear that the Quad members have a shared imperative to build diversified critical minerals supply chains to secure their economic and national security interests.

However, building secure critical minerals supply chains is a complex, multilayered challenge. During the roundtable, participants raised a series of commercial, technological and coordination issues that must be addressed. These challenges can be best summarised across three key fronts:

  • The commercial front: Improving the commercial viability of Quad producers by shielding them from predatory pricing and restoring long-term investor confidence.
  • The technological front: Developing sovereign critical minerals IP and training a skilled workforce.
  • The coordination front: Sequencing supply-side and demand-side investments to build end-to-end critical minerals supply chains.

Adding to these challenges is the use of non-market practices by China and other dominant producers to maintain their market dominance. This includes a mix of export controls on resources and technology, government subsidies and price manipulation.

US Navy and members of the Australian and Indonesian militaries unload aid and supplies to refugees across Sumatra, Indonesia after the 2004 Indian Ocean tsunami and earthquake.
US Navy and members of the Australian and Indonesian militaries unload aid and supplies to refugees across Sumatra, Indonesia after the 2004 Indian Ocean tsunami and earthquake.Source: Getty

This should not come as a surprise. China’s most recent Five-Year Plan,21 released in March 2026, clearly states its intentions to expand its control over mineral supply chains.22 For many mineral-exporting countries — China, the Congo, Indonesia — critical minerals represent a key geopolitical and economic asset. It is logical that these countries would seek to maintain and even expand their advantages.23 Acknowledging this, the Quad should be conscious of how these non-market practices might impact efforts to build diversified critical minerals supply chains.

This chapter provides further details on the three fronts of the critical minerals challenge.

The three fronts of the critical minerals challenge: Roundtable participant views

The commercial front

  • Price benchmarks for some critical minerals, particularly rare earths, are being driven to artificially low levels by subsidised Chinese production. Without accurate benchmarks, producers struggle to attract investment.
  • China is actively bidding up the cost of mineral deposits and assets in key overseas markets across Africa and South America using state-owned enterprises, further constraining the ability of other companies to secure access to quality resources at competitive prices.
  • Participants reported that Western manufacturers and end-users of critical minerals are demonstrating a willingness to pay a premium for secure and stable supply from Quad countries, which could help improve the commercial prospects of Quad producers.

The technology front

  • China dominates the midstream stages of critical minerals supply chains, including processing, refining, separation and magnet manufacturing.
  • This control extends to the IP and technologies that underpin the midstream sector.
  • China has demonstrated a willingness to restrict access to this IP and technology as part of its broader economic coercion efforts.
  • Building a suite of sovereign IP that is cost-competitive and environmentally sustainable is a key challenge. There are examples of innovative mining, processing and manufacturing techniques being deployed across the Quad countries, which are discussed in more detail below.

The coordination front

  • Building sufficient demand for critical minerals at downstream parts of the supply chain, such as magnet manufacturing, automakers, and defence primes is crucial. Weak coordination between supply side investments and demand side commitments means that new or proposed projects can lack the offtake certainty needed to attract financing.
  • Without offtake at the right price and scale, many critical minerals projects will struggle to secure the investment required. Participants pointed to the US Government’s guarantee of MP Material’s rare earths offtake as a critical enabler of that deal’s success.
  • Regulatory approvals and permitting remains a key constraint across all Quad members.
  • The Quad must prioritise specific minerals and supply chains, however there are challenges in coordinating this across all four governments.

The commercial front

Improving the long-term commercial viability of critical minerals mining and processing across the Quad countries is crucial to building diversified supply chains. Improving long-term viability will create the investor confidence needed to attract private capital. This is a crucial aspect of the critical minerals challenge and is necessary for building resilient supply chains that can weather price shocks.

Currently, dominant producers are leveraging their market position to keep prices for some critical minerals artificially low. At times, such as for rare earth elements, prices can be so low that the global industry is unprofitable for a sustained period and is propped up by government subsidies.24 Further, there is significant uncertainty around how prices are set.

Many critical minerals do not have standardised pricing contracts or futures, which are foundational for investor certainty. In many instances, prices are not set by open market forces but are decided through opaque formulas or government policy.25

In this commercial environment, the risk-adjusted return for critical minerals projects in Quad countries is not high enough to meet ‘hurdle rates’26 for private investors. For a typical mining project focused on commodities such as iron ore or gold, a typical investor would expect a return of at least 15% on the cost of capital.27

However, critical minerals projects present a much riskier long-term investment due to price volatility, small scale and fewer offtake options, and therefore have a higher hurdle rate. Quad members should focus on both reducing the riskiness of these investments and increasing their financial rate of return.

To this end, a series of policy options are available to Quad members:

  • De-risking critical minerals projects by directing government support and unlocking access to cheaper capital.
  • Supporting an accurate price that reflects the true costs of responsibly mining and processing critical minerals and supply-demand dynamics.
  • Providing long-term investor confidence through offtake guarantees and price floors.

The technological front

To build sovereign critical minerals supply chains, the Quad and allies need sovereign IP and technology. Currently, China owns a significant amount of IP across the entire critical minerals supply chain, from mining to processing, manufacturing and recycling. One study estimates that China owns almost 60% of all patents related to rare earth element production. It also found that for every full-time researcher in the United States looking into rare earths, China had 40 researchers focused on the same subject.28

For every full-time researcher in the United States looking into rare earths, China had 40 researchers focused on the same subject.

Further, China also dominates production of many of the technological and physical inputs into these supply chains, such as advanced furnaces, mixer-settlers and specialised chemical extractants used to separate specific rare earth elements.29 This allows China to control which countries and companies have access to the latest IP and physical inputs, as well as the hiring of Chinese experts,30 and represents a key challenge for the Quad.

Developing sovereign critical minerals IP and physical input supply chains will require concerted efforts over a sustained timeframe. These technologies and processes need to be cost-effective, but not necessarily cost-competitive with China, and must adhere to environmental and health standards.

Quad countries are also leaders in innovation and IP. The United States led global IP exports31 in 2022 (US$127 billion), with Japan ranked third largest (US$46 billion).32 India’s IP exports grew 34% in 2022 compared to 2021. There is significant scope to direct more research and development efforts towards critical minerals mining, processing and manufacturing.

There are already promising examples of sovereign critical minerals IP development across the Quad:

A number of options are available to support the development of sovereign IP and achieve technological independence in critical minerals. These include:

  • Supporting research and development through direct government investment into research centres, universities, startups and private industry — this can take the form of outcomes-based grants, longer-term funding and government-backed venture capital.
  • Attracting private sector investments in innovation through targeted tax policies.
  • Promoting technology transfer and dissemination across allied partners through business-to-business (B2B) and government-to-government (G2G) engagements.
  • Enabling pilot and demonstration projects to help test innovations and achieve commercial scale.
  • Growing domestic labour forces for critical minerals mining and processing, including specialists in metallurgy and downstream processing.
Japanese automakers are dependent on stable rare earths supply.
Japanese automakers are dependent on stable rare earths supply.Source: Getty

The coordination front

Building effective critical minerals value chains requires action on both the supply and demand sides. During the roundtable discussion, participants routinely returned to the importance of securing bankable offtake (demand) agreements as crucial to unlocking new supply. Many projects have strong geological and financial foundations but are unable to secure investment without offtake demand.

Scale is critical to success, and it must be built at all points in the supply chain. Currently, a lack of scale at key downstream points in the supply chain — manufacturing of magnets, batteries and renewable energy technology inputs — is holding back new supply.

This places an emphasis on the Quad to build up both the supply of critical minerals through mining and processing and the demand through magnet, semiconductor and battery manufacturing.

This introduces a major coordination challenge of sequencing investments to build end-to-end supply chains. The challenge is multiplied by the need to coordinate across several different governments and prioritise across dozens of critical minerals. To address the coordination challenge, it may be necessary for the Quad to prioritise specific minerals and supply chains for government attention and support.

  • Regardless of which supply chains are prioritised, the Quad can consider some actions to build the system-level foundations for coordinating investments:
  • Providing long-term government offtake guarantees to help sync supply and demand, similar to the US Government’s agreement with MP Materials, Project Vault and the Australian Government’s Critical Mineral Strategic Reserve.
  • Accelerating permitting and project development where possible.
  • Setting up ‘matchmaking’ platforms to aggregate demand and market creation to link demand to supply, similar to the European Union’s Energy and Raw Materials Platform.39
  • Supporting scale in processing/refining by pooling offtake from multiple sources, noting some limitations around blending ore with different purities and characteristics.
  • Incentivising manufacturers and key end-users to enter offtake agreements with Quad producers, potentially through incentives (direct financial support) and protectionism (tariffs or local content requirements).
  • Developing a compliance and traceability standard to ensure that critical minerals are produced to minimum environmental and social standards.
  • Identifying third-party countries that could play a key role in processing critical minerals, such as Vietnam or Malaysia which have strong processing industries and offer a low-cost business environment.

Options for structured cooperation on critical minerals

While there are clear complementarities among the Quad across critical minerals supply chains, Quad countries should be realistic and targeted in their cooperation. They must acknowledge the constraints of their individual administrative systems and resources. The Quad has sufficient national security alignment and economic capacity to make tangible progress individually and collectively. As a small group of like-minded nations, the Quad can be particularly responsive to changing strategic conditions and could form a core leadership group in larger multilateral settings.

The challenge is great. Building secure critical minerals supply chains will require concerted action across each of the three fronts described in the section above. Further, it will require coordinated actions by each Quad member, the Quad as a collective, and with allies and partners outside of the Quad, like South Korea and Europe.

Structured cooperation on critical minerals: Roundtable participant views

During the workshop, participants presented a suite of options for the Quad to diversify critical minerals access. There was broad agreement that the Quad should extend its cooperation to include other partners such as South Korea and Europe to advance some of these options.

Options included:

  • Establishing minimum price floors that reflect the true cost of responsibly extracting, processing and manufacturing, which can shield producers from predatory pricing and restore long-term investor confidence.
    • Existing price floor arrangements, including between the US Government and MP Materials, were pointed to as key examples, which effectively managed price risks on both sides.
  • Long-term (at least 10-year) government offtake guarantees which give producers certainty on demand and can help build stockpiles or ‘buffer stocks’ to mitigate risks of unstable supply, such the US Government’s Project Vault and the Australian Government’s Critical Minerals Strategic Reserve.
  • A formalised trade agreement across the Quad — and other partners where needed — focused on unlocking investment in critical minerals and coordinating supply chains, which would build on existing bilateral agreements between Quad members. This agreement could also give the Quad the option to set up border-adjusted reference prices through tariffs or procurement standards.
  • A standards-based certification system to ensure critical minerals are produced using environmentally sustainable methods and without forced labour would help lift the standards across the industry. This could function similarly to current international certification standards around a range of resources such as timber, fisheries and coffee.

Reflecting the scale of the challenge, some of the policy options discussed during the expert roundtable were ambitious and expensive, such as minimum price floors and long-term government offtake guarantees. It is unlikely that the Quad could dedicate the resources needed to implement each of these options in its entirety.

Acknowledging this, some of these ambitious options are presented alongside a series of ‘force multipliers’ — low-cost options which could make outsized progress towards building secure critical minerals supply chains. These force multipliers would present quick-win, no-regret policies that the Quad can consider to set the groundwork for more ambitious, longer-term policy action.

The United States held the first Critical Minerals Ministerial meeting in February 2026 with 55 countries participating in an effort to coordinate on unlocking new critical minerals supply.
The United States held the first Critical Minerals Ministerial meeting in February 2026 with 55 countries participating in an effort to coordinate on unlocking new critical minerals supply. Source: Getty

The force multipliers

Aligning the tax system to the challenge at hand

  1. Recalibrating royalty rates to protect critical minerals producers during low-price periods. Royalty rates do not reflect the price volatility affecting many critical minerals producers. Typically, rates are calculated based on the value of the mineral (ad valorem rate). When prices are low and profits are squeezed, these royalty rates often remain the same, putting pressure on producers.

    Critical minerals projects are unlikely to make steady, stable profits. Price volatility means that profits at individual projects can vary considerably across the life of the project. Lynas, a major Australian rare earths producer, has seen its revenue fluctuate significantly since 2020.40

    In many jurisdictions, including Australia, royalty rates increase as prices rise to capture windfall profits — just as people on higher incomes usually pay a higher income tax rate. The same logic could apply to subsidising critical minerals production when the price is low. When prices are particularly low, governments could waive the royalty rate or even provide a ‘negative royalty’ (subsidy). This would help give investors greater confidence to navigate temporary low-price periods and prevent mines from being mothballed. If appropriately designed, this tax structure could have minimal impacts on the broader tax base.
  2. Aligning tax incentives across the Quad. Each Quad member has a suite of tax incentives designed to encourage onshore production, as well as increase research and development efforts. These tax incentives should be reviewed to assess where they can be extended to critical minerals sourced from other Quad partners. For the United States, this could involve extending the Section 45X tax credits41 to incentivise American automakers to source rare earths from Japan or defence contractors to source antimony from Australia.42

    Critical minerals innovation is complex and often requires unique scientific capabilities that may not be present in some countries. Each Quad member should undertake a systematic review of their R&D tax incentives to remove barriers to R&D spending across the Quad and help attract more investment into technologies that can unlock supply.

Targeting research and development investment towards critical minerals

  1. Collaborating on recycling and recovery technologies. Recycling and recovery of critical minerals through e-waste, mine tailings and scrap will be key to unlocking secure supply. Significant efforts are already underway in Japan and India particularly to build up a secondary production sector.

    Quad members could collaborate on recycling standards, processes, collection and innovation. Considering the significant labour and energy requirements associated with recycling, Quad members will need to work together to ensure that recycling can be a cost-effective method of critical minerals production. This extends to streamlining the import/export regulations on waste products to ensure that they can reach the right markets.
  2. Supporting venture capital investments targeted at startups developing innovative critical minerals processing and extraction technologies. Each Quad member should consider co-investing with the private sector to support venture capital investments targeted at developing innovative processing and extraction technologies. The US Government, through its Compass Fund, is already doing this.

    For best results, governments should partner with existing venture capital funds to achieve this, which would help to limit the costs of due diligence and fund management, and maximise performance. If designed effectively, these investments are likely to generate positive returns to government over time.

Deepening coordination at the Quad

  1. Pooling offtake demand and supply across the Quad. To support scale across the Quad, each member should empower their export credit agencies to act as a matchmaker between critical minerals supply and demand, helping coordinate investments, pooling offtake and acting as a ‘buyer of last resort’. A buyer of last resort would ensure that producers can maintain production levels even during periods where offtake demand is temporarily sluggish. Ideally, this would be coordinated across the Quad and other allies for maximum effect.
  2. Funding a detailed Quad supply chain capability analysis. The Quad needs to set clear and narrow priorities around which critical minerals to target in the immediate and longer term, and which parts of the supply chain should be built up domestically, acknowledging each Quad member’s comparative advantages. The first step should be creating a working group to assess the existing capabilities, where the gaps lie and the role each country could play in different critical minerals supply chains. This study would help the Quad set priorities and direct investment to plug supply chain gaps. At the outset, this study could focus on rare earths, battery minerals and semiconductor inputs.

Supplementary options

In addition to these force multipliers, a series of supplementary policy options were discussed. These options, individually or collectively, would make progress towards building critical minerals supply chains across the Quad.

They are presented as country-level policies that each Quad member should pursue within their domestic administration frameworks, Quad-level policies that should be pursued as a group, and Quad-plus policies that would benefit from collaboration with other partners, like Europe and South Korea.

Country-level policies

  1. Shoring up the commercial sustainability of existing refineries and processing, including base commodities such as steel, aluminium and copper. This could include supporting capital renewals at existing refineries, particularly where doing so can enable refineries to extract and process critical mineral by-products, such as gallium, antimony and germanium.
  2. Building a critical minerals workforce through targeted scholarships and collaboration with universities.
  3. Funding pilot processing plants to test and improve new innovations.
  4. Accelerating permitting and project development where possible.
Researchers at Indian Rare Earths Limited (IREL) have developed a method of extracting rare earths from sand.
Researchers at Indian Rare Earths Limited (IREL) have developed a method of extracting rare earths from sand.Source: Getty

Quad-level policies

  1. Creating a Quad investment fund and/or partnering with the Quad Investors Network to actively support critical minerals projects with supply chain linkages across multiple Quad members.
  2. Promoting technology transfers and IP dissemination across the Quad, including discounted licensing arrangements.
  3. Syncing domestic stockpiling efforts, where possible, to ensure Quad members can purchase from each other’s stockpiles if needed, similar to how fuel stockpiles are managed under the International Energy Agency.
  4. Setting up a mutual project fast-tracking system, where Quad members can coordinate fast-tracking of projects with linkages across the Quad.

Quad-plus policies

  1. Engaging with other strategic partners to develop accurate price benchmarks and ensure that offtake contracts are aligned with these benchmarks.
  2. Identifying where stronger commercial ties with Southeast Asian nations might be necessary to plug gaps in the Quad’s supply chains, such as in midstream processing.
  3. Promoting Quad technologies and IP to other strategic partners to present a viable alternative to Chinese technology.
  4. Developing a global standards-based certification system for critical minerals that promotes transparent supply chains and ensures that critical minerals are produced to high ESG standards, such as the European Union’s Battery Passport regulations.
  5. Sharing market intelligence and supply risk modelling with other partners to help anticipate and plan for critical minerals supply chain disruptions.

Next steps

Addressing economic security challenges, including ones as broad and complex as establishing new critical minerals supply chains, is a problem that many nations are grappling with globally. Multilateral cooperation is the only way to diversify mineral supply chains. The Quad’s contained membership and complementary capabilities give it unique advantages. While Quad cooperation is ambitious, and stronger political alignment and will are needed in the short term, the challenge is not insurmountable. All Quad countries have strong incentives to cooperate for their national and economic security.

This Quad Critical Mineral expert workshop reflected the complexity of the challenge ahead but also established parameters for cooperation. It took stock of national positions and surfaced ideas for further research, socialisation and refinement. In particular, the workshop identified three challenges — commercial, technological and coordination — as the primary areas for the Quad to address in any future cooperation. Categorising multiple challenges in this way provides a structure for the Quad governments and private sectors to break the issue down into smaller subsets and better organise their efforts.

As this was a first-of-its-kind discussion involving Quad governments and private sectors, it reinforced the collective will to act and build interpersonal connections between participants, which are crucial to driving cooperation within large bureaucracies and private industry. But, if Quad members are to realise their cooperation ambitions, more regular engagement and sustained effort are needed. The next opportunity for government-industry coordination will be at the second Quad Critical Mineral workshop in October 2026.

Endnotes
  1. US Department of State, “2025 Quad Foreign Ministers’ Meeting,” US Department of State, 1 July 2025, https://www.state.gov/releases/office-of-the-spokesperson/2025/07/2025-quad-foreign-ministers-meeting https://www.state.gov/releases/office-of-the-spokesperson/2025/07/2025-quad-foreign-ministers-meeting
  2. Minister for Foreign Affairs, “Quad critical minerals initiative Framework among The United States, Japan, Australia, and India,” Australian Government, 26 May 2026, https://www.foreignminister.gov.au/minister/penny-wong/media-release/quad-critical-minerals-initiative-framework-among-united-states-japan-australia-and-india
  3. Minister for Foreign Affairs, “Quad critical minerals initiative Framework among The United States, Japan, Australia, and India,” Australian Government, 26 May 2026, https://www.foreignminister.gov.au/minister/penny-wong/media-release/quad-critical-minerals-initiative-framework-among-united-states-japan-australia-and-india
  4. Tae-Yoon Kim, Shobhan Dhir, Amrita Dasgupta and Alessio Scanziani, “With New Export Controls on Critical Minerals, Supply Concentration Risks Become Reality,” International Energy Agency, 23 October 2025, https://www.iea.org/commentaries/with-new-export-controls-on-critical-minerals-supply-concentration-risks-become-reality
  5. Export Finance Australia, “Australia—Higher Lithium Exports Supported by Strong Mine Output,” Export Finance Australia, May 2025, https://www.exportfinance.gov.au/resources/world-risk-developments/2025/may/australia-higher-lithium-exports-supported-by-strong-mine-output/#:~:text=Risks%20to%20EV%20uptake%20include%20uncertainty%20about,US%20will%20help%20reduce%20market%20concentration%20risk.
  6. Tom Corben, “By the Numbers: US Missile Production Shortfalls,” United States Studies Centre, 18 March 2026, https://www.ussc.edu.au/by-the-numbers-us-missile-production-shortfalls
  7. Macdonald Amoah, Morgan D. Bazilian and Jahara Matisek, “The First 36 Hours of War Consumed Over 3,000 U.S.-Israeli Munitions: Replenishing Stockpiles Depends on Vulnerable Critical Mineral Chains,” Foreign Policy, 5 March 2026, https://foreignpolicy.com/2026/03/05/iran-war-munitions-critical-minerals/
  8. Lewis Jackson, Amy Lv, Eric Onstad and Ernest Scheyder, “China hits back at US tariffs with export controls on key rare earths,” Reuters, 5 April 2025, https://www.reuters.com/world/china-hits-back-us-tariffs-with-rare-earth-export-controls-2025-04-04/
  9. Reuters, “China expands rare earths restrictions, targets defense and chips users,” Reuters, 10 October 2025, https://www.reuters.com/world/china/china-tightens-rare-earth-export-controls-2025-10-09/
  10. Allison Lampert, Laurie Chen, Lewis Jackson and Michael Martina, “Exclusive: Rare earth shortages worsen in US aerospace, chips despite trade truce, sources say,” Reuters, 26 February 2026, https://www.reuters.com/business/aerospace-defense/rare-earth-shortages-worsen-us-aerospace-chips-despite-trade-truce-sources-say-2026-02-26/
  11. Dylan Butts, “China Suspends Some Critical Mineral Export Curbs to the U.S. as Trade Truce Takes Hold,” CNBC, 9 November 2025, https://www.cnbc.com/2025/11/10/china-suspends-some-critical-mineral-export-curbs-to-the-us-as-trade-truce-takes-hold.html
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  13. Reuters, “China curbs rare earth exports to Japanese companies after dual-use ban, WSJ reports,” Reuters, 9 January 2026, https://www.reuters.com/world/asia-pacific/china-curbs-rare-earth-exports-japanese-companies-after-dual-use-ban-wsj-reports-2026-01-08/
  14. Peter Ker and Mark Wembridge, “BHP’s price deal with China leaves mark on rivals and minnows alike,” Australian Financial Review, 3 May 2026, https://www.afr.com/companies/mining/bhp-s-price-deal-with-china-leaves-mark-on-rivals-and-minnows-alike-20260428-p5zrrq
  15. Katharine Gemmell and Alfred Cang, “China’s state iron ore buyer summons traders on BHP restrictions,” Australian Financial Review, 6 March 2026, https://www.afr.com/companies/mining/china-s-state-iron-ore-buyer-summons-traders-on-bhp-restrictions-20260306-p5o80j
  16. Peter Ker, “Chinese iron ore truce reports bolster BHP,” Australian Financial Review, 14 April 2026, https://www.afr.com/companies/mining/chinese-iron-ore-truce-reports-bolster-bhp-20260414-p5znus
  17. Rimjhim Singh, “Beijing seeks assurance from India on no US re-export of heavy rare earths,” Business Standard, 9 October 2025, https://www.business-standard.com/economy/news/china-india-heavy-rare-earth-magnets-export-us-trade-supply-chain-125100900238_1.html
  18. Dylan Butts, “China Suspends Some Critical Mineral Export Curbs to the U.S. as Trade Truce Takes Hold,” CNBC, 9 November 2025, https://www.cnbc.com/2025/11/10/china-suspends-some-critical-mineral-export-curbs-to-the-us-as-trade-truce-takes-hold.html
  19. Xin Liu, Nabeel Yousef, Stephanie Brown Cripps and Pauline Peng, “China Intensifies Export Controls over Rare Earths and Related Technologies,” Freshfields, 14 October 2025, https://riskandcompliance.freshfields.com/post/102lpyn/china-intensifies-export-controls-over-rare-earths-and-related-technologies
  20. Eric Buisson, Shobhan Dhir, Alexandra Hegarty, Kentaro Miwa, Nicolas Moinier, Mari Nishiumi, Joyce Raboca, Alessio Scanziani and Sungmin Seo, “Rare Earth Elements: Pathways to Secure and Diversified Supply Chains,” (International Energy Agency, 8 April 2026), https://www.iea.org/reports/rare-earth-elements
  21. The Five-Year Plan is published every five years and outlines the Chinese Communist Party’s economic and development priorities for the next five years.
  22. Xinhua News Agency, “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China,” The State Council of the People’s Republic of China, 13 March 2026, https://www.gov.cn/yaowen/liebiao/202603/content_7062633.htm
  23. Reuters, “What’s in China’s New Five-Year Plan for Commodity Markets,” Reuters, 5 March 2026, https://www.reuters.com/sustainability/climate-energy/whats-chinas-new-five-year-plan-commodity-markets-2026-03-05/
  24. Adele Stratton, “Iluka Resources (ASX:ILU) — Macquarie Conference,” Iluka, conference presentation, 8-9 May 2026, https://www.iluka.com/media/ytshg3mz/presentation-macquarie-conference.pdf
  25. Muflih Hidayat, “Critical Minerals Pricing Debate: Exposing Western Market Vulnerabilities,” Discovery Alert, 10 January 2026, https://discoveryalert.com.au/critical-minerals-pricing-debate-geopolitical-impact-2026/
  26. A hurdle rate is the minimum rate of return on an investment a company or investor requires before they will commit money to a project or investment.
  27. Keaton Jenner, Aaron Walker, Cathie Close and Trent Saunders, “Mining Investment Beyond the Boom,” Reserve Bank of Australia Bulletin, March 2018, https://www.rba.gov.au/publications/bulletin/2018/mar/pdf/mining-investment-beyond-the-boom.pdf
  28. James Laurenceson and Marina Zhang, “What Australia Needs to Understand about China’s Technological Edge in Critical Minerals Supply Chains,” (Australia-China Relations Institute, 27 March 2024), https://www.uts.edu.au/globalassets/sites/default/files/2024-05/20240328-acbc-uts-acri-brief---what-australia-needs-to-understand-about-chinas-technological-edge-in-critical-minerals-supply-chains---james-laurenceson-and-marina-zhang.pdf
  29. Rare Earth Exchanges, “Chemicals: The Hidden Backbone of Rare Earth Refining,” Rare Earth Exchanges, 11 January 2026, https://rareearthexchanges.com/news/chemicals-the-hidden-backbone-of-rare-earth-refining/#:~:text=China's%20dominance%20in%20rare%20earths,ecosystem%20for%20rare%20earth%20processing.
  30. Keith Bradsher, “Step by Step, How China Seized Control of Critical Minerals,” New York Times, 27 October 2025, https://www.nytimes.com/2025/10/27/business/china-rare-earth-export-controls.html
  31. IP exports refer to the revenue earned when a country licenses or sells the rights to use their intellectual property to entities in foreign markets. It serves as a key indicator of a nation’s ability to commercialise innovation and compete in the global knowledge economy.
  32. Davide Bonaglia and Sacha Wunsch-Vincent, “Cross-Border Payments for the Use of Intellectual Property (IP) Surpass 1 Trillion US Dollars in 2022, a Record High,” World Intellectual Property Organization, 28 June 2024, https://www.wipo.int/en/web/global-innovation-index/w/blogs/2024/cross-border-payments-ip
  33. Tom Kool, “China’s Rare Earth Grip on the U.S. Military Is About to Break,” MINING.COM, 2 March 2026, https://www.mining.com/press-release?id=69a5ab369e06ac4a71cb0ed8
  34. Canadian Mining Journal Staff, “REalloys’ Breakthrough Could Eliminate Hydrofluoric Acid from Rare-Earth Metallization,” Canadian Mining Journal, 17 March 2026, https://www.canadianminingjournal.com/news/realloys-breakthrough-could-eliminate-hydrofluoric-acid-from-rare%E2%80%91earth-metallization/
  35. Staff Writer, “Lynas Becomes First Producer of Heavy Rare Earths Outside China,” MINING.COM, 16 May 2025, https://www.mining.com/lynas-becomes-first-producer-of-heavy-rare-earths-outside-china/
  36. Peter Ker and Mark Wembridge, “Lynas Warns China Will Starve Rare Earths Projects of Equipment,” Australian Financial Review, 30 October 2025, https://www.afr.com/companies/mining/lynas-warns-china-will-starve-rare-earths-projects-of-equipment-20251029-p5n69e
  37. Amal Chandra, “Rare Earths Armistice: India’s Shift from Mining to Processing,” Observer Research Foundation, 12 November 2025, https://www.orfonline.org/expert-speak/rare-earths-armistice-india-s-shift-from-mining-to-processing#:~:text=The%20IREL's%20research%20centre%20works,based%20on%20home%2Dgrown%20innovations.
  38. Ministry of Mines, “Rajya Sabha Unstarred Question No. 1080, answered 9 February 2026 — India’s Critical Mineral Mission and Promotion of Self-Reliance,” Government of India, n.d., https://sansad.in/getFile/annex/270/AU1080_lEobUH.pdf?source=pqars
  39. The European Union’s Energy and Raw Materials Platform is a website that companies can use to identify buyers and sellers of critical minerals. It allows companies to find buyers, aggregate purchase orders and diversify supply chains.
  40. Lynas Rare Earths, “Lynas Rare Earths FY26 Half Year Presentation,” Lynas Rare Earths, 26 February 2026, https://wcsecure.weblink.com.au/clients/lynascorp/headline.aspx?headlineid=61313816
  41. The 45X tax credit subsidises the production of solar energy components, wind energy components, battery components, inverters and critical minerals that are produced in the United States.
  42. Gracelin Baskaran, “Unleashing America’s Mineral Potential: The Critical Minerals Commodity Supply Chain,” Center for Strategic and International Studies, 25 March 2026, https://www.csis.org/analysis/unleashing-americas-mineral-potential-critical-minerals-commodity-supply-chain