Mint Explainer: Can Pax Silica, with India's backing, break China’s dominance in critical minerals?

Mint examines whether such an initiative can succeed, and why it is important.

What is the Pax Silica initiative?

The initiative aims to bring together countries across continents to collaborate on diversifying the supply chains of critical minerals such as lithium, rare-earth elements, gallium, germanium, palladium, and indium, among others, which are used in sectors ranging from artificial intelligence infrastructure to automobiles.

Launched by the US in December 2025, it will look to collaborate 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, the Republic of Korea, Singapore, the United Arab Emirates, and the United Kingdom. Non-signatory partners include countries like Canada, the European Union, the Netherlands, the Organization for Economic Cooperation and Development, and Taiwan.

Why is the US pushing the Pax Silica initiative?

Be it artificial intelligence, green energy, or electric vehicles, all depend on the availability of critical minerals—many of which are heavily concentrated in China. The East Asian country controls about 90% of global rare-earth processing and refining capacity and roughly 70% of mining output. It accounts for nearly 69% of global installed lithium-ion battery capacity, which powers electric vehicles and energy storage systems.

Training AI models also relies on graphics processing units that use gallium arsenide semiconductors, while the supporting infrastructure depends on germanium-based fibre 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 collaborations on the latest lithium-ion battery technology. Conflict with the EU over the control of semiconductor company Nexperia also led to a halt in exports of the company's chips from China, causing shortages in Europe.

The overwhelming reliance on China has prompted countries to consider diversifying their supply chains. In a way, the initiative carries forward Western countries' efforts to diversify away from a China-dominated supply chain, which began after the covid-19 outbreak.

Why is China so dominant in the critical minerals supply chain?

China’s efforts to ramp up its presence in the critical minerals supply chain began in the late 1980s. While countries such as France and the US tightened environmental regulations, China expanded production. The policy push, backed by subsidies, triggered a production boom in the 1990s, with rare-earth mineral output rising from 16,150 tonnes in 1991 to 65,000 tonnes in 1998—an annual growth rate of 22%. A similar story played out for other critical minerals, such as lithium.

What also helped China’s bid to dominate the supply chain is the fact that it holds the largest reserves of rare-earth elements and lithium. Moreover, Chinese companies have taken stakes in mines across South American countries such as Chile and Brazil, as well as in African countries such as Congo, Zambia, and Zimbabwe.

Where does India fit in the equation?

India has so far remained on the sidelines of the critical mineral supply chain owing to the lack of reserves or required technology to mine and process. In 2023, the government confirmed the discovery of lithium reserves in Jammu and Kashmir, but little has moved since then. The country continues to be dependent on China for the import of lithium-related products.

The situation with rare earth is different. The country holds the fifth-largest rare-earth reserves in the world, but mining and refining operations have been limited, which the government is now aiming to change.

For both lithium and rare earths, the biggest impediment has been the required technology and capital expenditure needed to fund such operations. The government has launched a ₹34,300 crore National Critical Minerals Mission (NCMM), which aims to increase India’s control on the critical mineral supply chain, from production to technology.

Can the initiative really challenge Chinese dominance?

In the short term, a direct competitor to China on the critical mineral supply chain is unlikely to emerge owing to the fact that such investments take years to materialize. However, a blueprint of how a collaboration between different countries can quickly prop up a rival exists.

During a July meeting of key businesses from Japan and India in the battery and critical minerals supply chain, industry representatives suggested that India could be a manufacturing and demand hub for critical minerals. This was considered under a possible partnership among the Quadrilateral Security Dialogue (Quad) countries, where Australia can serve as a raw materials supplier while Japan and the US can provide key technological support to ensure the partnership's success.

With the scope of partnership now expanding beyond Quad, a similar blueprint can now apply to Pax Silica. The success will depend on whether the member countries can agree on a roadmap for critical minerals. While India will need access to technology and funds, the US and other Western countries need access to reserves and cheap manufacturing capabilities.

“It is hard to out-mine, out-process, or out-fund China. Rather, the US should seek to leapfrog China’s dominance by unlocking and scaling disruptive innovation, recovery, and recycling," said a February 2026 note by the Council on Foreign Relations.