Regulatory Environment for Operationalising Quad Critical Minerals Partnerships

Introduction

The Quad Critical Minerals Initiative (QCMI), announced at the 2025 Foreign Ministers’ meeting, is an ambitious step toward ensuring resilient critical mineral availability across the four member countries, viz. Australia, India, Japan and the US. The May 2026 Foreign Ministers’ meeting outlined a statement on developing secure critical mineral supply chains, essential for advanced technologies, economic growth, and resilient industrial bases. One major component focused on regulatory alignment and the overall environment. It mentioned that the four countries should cooperate and share information on domestic regulatory frameworks; review and address critical-mineral transactions that threaten national security; conduct geographic mapping, technology development, and capacity building; and coordinate measures to address non-market policies and unfair trade practices.

Quad is building a framework under QCMI for cooperation on critical minerals. This framework includes a commitment to mobilise up to US$20 billion in government and private-sector capital for critical minerals projects across the Quad countries. This blog examines regulatory challenges in the operationalisation of QCMI and the future prospects of strengthening such partnerships for India.

Bilateral Engagements in Quad

Quad countries already have several bilateral partnerships in critical minerals through government and private investments. These investments span mineral supply chains and continue to grow, strengthening mineral cooperation among Quad countries. Table 1 provides some examples of such ongoing projects:

Table 1: Bilateral Quad Critical Mineral Partnerships

Source: Authors’ compilation based on various sources.

Bilateral projects between Quad countries also led to trilateral partnerships and joint funding in other regions. Australia, the US, and Japan have jointly funded the Alco Gallium Recovery Project and the Kalgoorlie Project. The Lynas Advanced Materials Plant in Malaysia for rare earths processing resulted from a strategic partnership between Australia and Japan through Lynas Rare Earths and JARE. However, many critical minerals initiatives among Quad countries have not yet delivered the desired investment growth, such as the Strategic Critical Minerals Cooperation Framework between the US and India, Pax Silica, and the Forum on Resource Geostrategic Engagement (FORGE). These initiatives have strong prospects of attracting investment and joint partnerships among key players from Quad countries.

Joint Stockpile as Strategic Reserves

One of the suggestions for building strategic reserves within the Quad critical minerals initiative was allowing domestic stockpiles to be purchased by other members at the time of supply shortage or price volatility. The United States and Japan have the most advanced critical mineral stockpiles among Quad members. The United States maintains two types of mineral stockpiles: the government-controlled National Defence Stockpile, established in 1939 and the public-private US Strategic Critical Mineral Reserve, established in  2026 as Project Vault. Japan, through JOGMEC, maintains a public-private mineral stockpile for 31 minerals. These reserves are maintained to meet 60 days of consumption and 180 days for minerals with high geopolitical risk exposure. India and Australia have both only very recently started building their critical minerals stockpiling strategy. Under the National Critical Minerals Mission, the Indian government budgeted US$5 billion to build critical mineral stockpiles. In Australia, the government introduced the Critical Minerals Strategic Reserve (CMSR) initiative, which lets companies apply for government funding to set up such reserves. The government has limited this policy to three minerals, antimony, Gallium, and Rare Earths, with federal funding of A$1.2 billion.

Creating a Quad critical mineral stockpile policy would first require countries to build their domestic stockpiles and strategic reserves significantly. Additionally, some of these strategic reserves are strictly government-controlled and cannot be accessed by private companies, such as the US national defence stockpile. Quad countries also rely heavily on imports to meet domestic demand for key critical minerals. Even for minerals with domestic resources and large production volumes, maintaining mineral stockpiles is harder without advanced processing capacity.

Regulatory Challenges for Quad Cooperation

The Quad critical minerals framework identifies the need to create a cohesive regulatory environment among member countries for critical mineral development. It focuses on streamlining domestic licensing and permitting for mineral projects, strengthening financial regulations, developing geospatial mapping technology and capacity, and addressing unfair trade practices. A consistent, transparent, and efficient regulatory environment attracts more global investment because stakeholders can better predict market risks. Quad countries have differing regulatory policies and strategies across the mineral supply chains:

• Mineral allocation: India uses a mineral auction system to allocate mineral concessions, which has led to high, irrational, and uncompetitive bids. Australia, Japan, and the US use a first-come, first-served (FCFS) method for mineral allocation, along with a selective screening process for critical and strategic minerals.
• Environmental, Social, and Governance (ESG): The standards companies must follow to meet ESG requirements are complex and vary across Quad countries. India does not require mandatory disclosures on gradual emissions reduction by companies, whereas Australia and Japan must disclose long-term environmental risks to projects. In the US, states have different obligations because both federal and state laws may apply.
• Trade restrictions: Countries use trade policies to protect local manufacturers’ interests, boost domestic mineral production, and avoid cheap raw materials imports. Since 2020, countries have introduced nearly 100 new export restrictions on critical minerals worldwide through licensing requirements, bans, taxes, and quotas. Earlier this year, the US had considered placing tariffs on various critical minerals, including rare earths and lithium. Quad countries currently have no restrictions on critical mineral trade; however, growing geopolitical tensions may prompt them to reconsider in the future.

Future Quad Opportunities for India

As shown in Table 1, bilateral partnerships between India and other Quad countries remain in their early stages. Quad countries have entered into other bilateral initiatives to operationalise joint investments and leverage each other’s strategic advantages across mining, processing, manufacturing, and recycling. Quad countries can be key strategic partners for India by providing mining and processing technologies, access to raw materials, capital investment, and collaboration on mineral recovery from end-of-life technologies. India’s current regulatory environment provides various opportunities for future Quad partnerships:

• United States: US companies have specific expertise in advanced mining and processing technologies. Collaboration between the Geological Survey of India (GSI) and the US Geological Survey (USGS) can help identify new mineral deposits, advance mapping, and further improve India’s geological data. High technology costs in the US will be a key factor in private sector collaboration on mining and processing technology.
• Japan: India and Japan previously entered into a joint agreement to process rare earths through IREL and TREI. This partnership had been discontinued due to Chinese export restrictions on rare earths. However, the introduction of the Rare Earth Corridor and the production-linked incentive scheme for rare earth permanent magnets in India has created a favourable environment to incentivise domestic investment in the rare earth processing sector. Japan can also play an important role in creating joint investment opportunities for Quad countries through JOGMEC in other regions, as seen in Toyota Group’s offtake commitment of 20,000 tonnes per year of rare earth from Longonjo mine in Angola to be further processed in India.
• Australia: Japan and Australia’s partnership under the Lynas and JARE critical minerals project is a prime example of minerals mined in Australia but processed at a much lower cost in Malaysia. Australia produces large quantities of key critical minerals like Lithium, Copper and Manganese. Recycling companies in India, like Lohum, have lithium processing capacity, and domestic companies also process copper and manganese. Australia can become a long-term supplier of these minerals through offtake agreements and by supporting domestic processing in India.