Mint examines whether such an initiative can succeed and why it is important.
What is the Pax Silica initiative?
The initiative aims to bring countries across continents together to work together to diversify the supply chains of critical minerals such as lithium, rare earth elements, gallium, germanium, palladium and indium, among others, which are used in industries ranging from artificial intelligence infrastructure to automobiles.
Launched by the US in December 2025, it will seek to work together across the entire supply chain: from technology to mining to the processing of critical minerals.
Currently, the initiative has nine official signatories: Australia, Greece, Israel, Japan, Qatar, Republic of Korea, Singapore, United Arab Emirates and United Kingdom. Non-signatory partners include countries such as Canada, the European Union, the Netherlands, the Organization for Economic Co-operation and Development and Taiwan.
Why is the US promoting the Pax Silica initiative?
Whether it’s artificial intelligence, green energy or electric vehicles, everything depends on the availability of critical minerals – many of which are heavily concentrated in China. The East Asian country controls about 90% of global rare earths processing and refining capacity and about 70% of mining production. It represents nearly 69% of the global installed capacity of lithium-ion batteries that power electric vehicles and energy storage systems.
The AI training models also rely on graphics processing units that use gallium arsenide semiconductors, while the supporting infrastructure relies on germanium-based fiber optics. China produces about 98% of the world’s gallium and controls nearly 60% of its refining.
In 2025, China imposed restrictions on the export of rare earth magnets and banned technical cooperation on the latest lithium-ion battery technology. A conflict with the EU over control of semiconductor company Nexperia has also led to a halt in the company’s chip exports from China, causing shortages in Europe.
The overwhelming dependence on China has prompted countries to consider diversifying their supply chains. In a way, the initiative continues Western countries’ efforts to diversify away from the Chinese-dominated supply chain that began after the outbreak of covid-19.
Why is China so dominant in the critical mineral supply chain?
China’s efforts to strengthen its presence in the critical mineral supply chain began in the late 1980s. While countries like France and the US tightened environmental regulations, China expanded production. Political pressure backed by subsidies triggered a production boom in the 1990s, with rare earth mineral production rising from 16,150 tonnes in 1991 to 65,000 tonnes in 1998 – an annual growth rate of 22%. A similar story has played out for other critical minerals such as lithium.
China’s bid to dominate the supply chain has also been aided by the fact that it has the largest reserves of rare earth elements and lithium. In addition, Chinese companies have taken stakes in mines in South American countries such as Chile and Brazil, as well as in African countries such as Congo, Zambia and Zimbabwe.
Where does India fit into the equation?
Until now, India has remained on the fringes of the critical mineral supply chain due to a lack of reserves or the necessary technology to mine and process it. In 2023, the government confirmed the discovery of lithium reserves in Jammu and Kashmir, but little has moved since then. The country remains dependent on China for imports of lithium-related products.
The situation is different for rare earths. The country has the fifth largest reserves of rare earths in the world, but mining and refining are limited, something the government is now trying to change.
For both lithium and rare earths, the biggest hurdle has been the technology required and the capital expenditure required to finance such operations. The government launched a ₹34,300 crore National Critical Minerals Mission (NCMM) to increase India’s control over the critical minerals supply chain, from manufacturing to technology.
Can this initiative really challenge China’s dominance?
In the short term, a direct competitor to China in the critical mineral supply chain is unlikely to emerge, given that such investments take years to materialize. However, there is a blueprint for how cooperation between different countries can quickly boost rivals.
During a July meeting of key companies from Japan and India in the battery and critical minerals supply chain, industry representatives suggested that India could be a production and demand center for critical minerals. This has been considered as part of a possible partnership between the Quadrilateral Security Dialogue (Quad) countries, where Australia can serve as a supplier of raw materials, while Japan and the US can provide key technological support to ensure the success of the partnership.
With the scope of the partnership now expanding beyond the Quad, a similar plan may now apply to Pax Silica. Success will depend on member countries agreeing on a plan for critical minerals. While India will need access to technology and funds, the US and other Western countries need access to reserves and cheap production capacity.
“China is hard to mine, process, or finance. Rather, the U.S. should seek to leapfrog China’s dominance by unlocking and expanding disruptive innovation, recovery, and recycling,” said a February 2026 note from the Council on Foreign Relations.
