United States prepares to tell the 35 signatories of its AI Opportunity Statement that joining Beijing’s rival World Artificial Intelligence Cooperation Organization will exclude them from Pax Silica

Why in the News

A draft United States letter warns the 35 signatories of its artificial intelligence (AI) Opportunity Statement that signing up to Beijing’s competing framework will exclude them from the American led Pax Silica coalition. The demand converts a supply chain initiative into a test of exclusive alignment. Kazakhstan, a potential source of critical minerals that has joined both coalitions, is the immediate trigger.

What is the Pax Silica initiative?

1. About: Pax Silica was launched by Washington last year to secure supply chains for AI models, semiconductors and critical minerals.
2. Purpose: It was built for the technology rivalry with Beijing, treating minerals and chips as the inputs that decide who builds the most capable AI.
3. Membership: About two dozen countries have joined, including close allies Japan, Australia and South Korea.
4. Legal character: The framework is not binding, so membership carries no treaty obligation.
5. The new condition: Members that also join Beijing’s rival body face exclusion from the coalition.

What is the AI Opportunity Statement?

1. About: A United States statement signed in June by 35 countries that wish to align AI cooperation with Washington.
2. Coverage: Its signatories include members of the Pax Silica framework and other countries outside it, and the draft warning letter is addressed to this full list.

What is the World Artificial Intelligence Cooperation Organization?

1. About: A rival body launched in July by the Chinese President as a challenge to United States influence over the AI sector.
2. Its offer: It promotes China’s open weight technology, positioning access to models rather than access to chips as the basis of membership.

What are open weight AI models?

1. About: Models whose trained parameters are published for download, allowing anyone to run and adapt them on their own hardware.
2. Why it matters strategically: Adoption does not require a continuing commercial relationship with the developer, so influence spreads without any agreement being signed.

What does the draft letter actually demand?

1. A binary choice: Dozens of countries are to be told they must pick sides in the AI race with China.
2. The penalty: Signing Beijing’s competing framework means exclusion from the United States led coalition.
3. The stated objective: Washington hopes to starve China of resources in the race to build the most sophisticated AI.
4. Why that matters: The most capable models are treated as usable for military or economic dominance, which is what makes inputs a security question.
5. The evidentiary basis: The warning rests on an internal draft and a United States official, not on a published policy.

Why do critical minerals sit at the centre of the AI race?

1. Minerals precede chips: Semiconductors, servers and power systems depend on rare earths, gallium, germanium and graphite before any model can be trained.
2. Refining, not mining, is the chokepoint: China dominates the midstream separation and refining stages even for ore mined elsewhere.
3. Export controls as leverage: Beijing has used licensing of gallium, germanium, graphite and rare earth magnets as a direct policy instrument.
4. Why Kazakhstan matters: It is a key potential source of critical minerals, which is why its dual membership set off alarm in Washington.
5. The self limiting problem: Excluding a supplier country does not create refining capacity anywhere else.

What do the individual signatories’ positions show about the cost of forcing a choice?

1. Kazakhstan, the hedger: It is the only country so far known to have joined both initiatives, using its mineral endowment to sell access to both blocs rather than choose.
2. Japan, the equipment supplier: A Pax Silica member whose firms control critical semiconductor manufacturing equipment, photoresists and wafer materials that no bloc can replace quickly.
3. South Korea, the memory chip producer: A Pax Silica member whose memory chip makers run large fabrication capacity inside China, so exclusivity carries a direct commercial cost.
4. Australia, the mining leg: A Pax Silica member with rare earth deposits and a dedicated critical minerals financing facility, but with separation capacity that has historically depended on offshore processing.
5. China, the rival architecture: Beijing counters chip and minerals leverage with the World Artificial Intelligence Cooperation Organization and freely downloadable models.
6. United States, the coalition builder: Washington combines export controls on advanced chips with Pax Silica membership, and now with the threat of exclusion.

Why does the exclusivity demand cut against the United States’ own supply goal?

1. Suppliers gain from hedging: A mineral rich state earns more by selling access to both coalitions than by picking one.
2. A framework with no enforcement: Pax Silica is not binding, so exclusion is the only available lever and it is a blunt one.
3. Open weight models cannot be fenced: Chinese models spread by download, so denying a country coalition membership does not deny it Chinese technology.
4. Refining dependence persists: The coalition can exclude a supplier and still find that separation and processing run through China.
5. Retaliation risk: Beijing can curtail exports of critical minerals essential to advanced technology production while Western supply chains are still being built.

Where does India stand in the AI and critical minerals contest?

1. Minerals Security Partnership: India joined the Minerals Security Partnership in June 2023, a United States convened grouping to catalyse investment in critical mineral supply chains.
2. National Critical Mineral Mission: Approved in January 2025 with an outlay of about 16,300 crore rupees, it targets exploration, recovery from tailings and overseas asset acquisition.
3. IndiaAI Mission: Approved in March 2024 with about 10,371 crore rupees, covering compute capacity, datasets, foundation model support and safe AI.
4. Summit diplomacy: India chaired the Global Partnership on Artificial Intelligence and hosted its summit in New Delhi in December 2023, and was named the next AI summit host after the Paris AI Action Summit of February 2025.
5. The strategic autonomy problem: India sits in United States aligned mineral platforms and in BRICS and the Shanghai Cooperation Organisation alongside China, so an exclusivity demand of the Pax Silica kind directly conflicts with its standing position.

Challenges to Pax Silica

1. No enforcement mechanism: A framework that is not binding cannot police dual membership. e.g. Kazakhstan has joined both Pax Silica and the Chinese body without penalty so far.
2. Substitution by the rival supplier: Excluded states can buy the same inputs and models from Beijing. e.g. China’s export licensing of rare earth magnets from April 2025 halted assembly lines at European car plants, demonstrating who controls the flow.
3. Cost falls on allies first: Export control regimes hit allied firms’ revenues before they hit the target. e.g. Dutch lithography equipment makers lost a large share of their China sales after successive export restrictions.
4. Midstream capacity cannot be built quickly: Mining new deposits does not solve separation and refining. e.g. Australian rare earth concentrate was long shipped to Malaysia for separation rather than processed at home.
5. Price volatility deters new investment: Mineral projects need long horizons that commodity cycles destroy. e.g. lithium prices fell sharply from their 2022 peak, stalling announced projects worldwide.
6. Open weight diffusion defeats membership rules: Model access spreads independently of any coalition. e.g. a Chinese open weight reasoning model released in January 2025 was downloaded and self hosted worldwide within weeks.
7. Third country resistance to bloc politics: Middle powers resist being made to choose. e.g. several Global South states hold membership of both Western and Chinese digital and minerals platforms simultaneously.

Conclusion

The AI contest has moved from controlling exports of chips to controlling membership of coalitions, and the United States is testing whether exclusivity can be enforced on countries that hold the minerals. The instrument is weak, since Pax Silica binds no one, open weight models spread by download, and refining capacity stays with China regardless of who is excluded. Kazakhstan’s dual membership is the first demonstration that suppliers will hedge. For India, an exclusivity demand of this type collides directly with a foreign policy built on membership of competing platforms.

Critical Minerals in India

1. About: Critical minerals are those with high supply risk and high economic importance, essential to semiconductors, batteries, magnets, defence systems and clean energy equipment.
2. India’s list: The Ministry of Mines expert committee identified 30 critical minerals for India in 2023, of which 24 were declared critical and strategic under mining law.
3. Import dependence: India is fully dependent on imports for lithium, cobalt, nickel, niobium, beryllium, germanium, rhenium and tantalum.
4. Domestic resources: Reserves and occurrences include rare earths in beach sand monazite along the eastern and south western coasts, and inferred lithium resources in Reasi in Jammu and Kashmir.
5. Institutional setup: The Geological Survey of India runs exploration projects, Khanij Bidesh India Limited (KABIL) acquires overseas assets, and offshore mineral blocks were opened to auction.
6. Global standing: India is a significant producer of ilmenite, rutile and garnet from beach sands, but holds negligible share of global refining and magnet manufacturing.

Constitutional Framework Governing Minerals and Technology Regulation

1. Article 246 with Union List Entry 54: Places regulation of mines and mineral development under Union control where declared expedient in the public interest by Parliament.
2. State List Entry 23: Gives States regulation of mines and mineral development, subject to Union List Entry 54.
3. Union List Entry 52: Covers industries declared by Parliament to be expedient in the public interest, which is the basis for central control of strategic sectors.
4. Article 253: Empowers Parliament to legislate to implement international agreements, including minerals and technology partnerships.
5. Article 297: Vests in the Union all minerals and other valuable things underlying the territorial waters, continental shelf and exclusive economic zone.

Laws and Rules Governing Critical Minerals and AI in India

1. Mines and Minerals (Development and Regulation) Act, 1957: The parent statute governing grant of mineral concessions and mineral development.
2. The 2023 amendment created a list of 24 critical and strategic minerals in a new Part D of the First Schedule and reserved their auction to the Central Government, and introduced an exploration licence for deep seated minerals.
3. The 2025 amendment widened recovery of critical minerals from mining waste and tailings and broadened the exploration licence regime.
4. Offshore Areas (Mineral Development and Regulation) Act, 2002: Governs mineral rights in territorial waters and the exclusive economic zone.
5. The 2023 amendment introduced auction of offshore mineral blocks by competitive bidding.
6. Atomic Energy Act, 1962: Governs prescribed substances including monazite bearing rare earths and uranium, restricting private handling.
7. Information Technology Act, 2000: The parent statute for intermediary liability and content regulation applied to AI generated material.
8. Digital Personal Data Protection Act, 2023: Governs processing of personal data used to train and deploy AI systems in India.

Back2Basics: Minerals Security Partnership

1. Launched: June 2022, convened by the United States.
2. Purpose: To catalyse public and private investment in responsible critical mineral supply chains and reduce concentration in a single supplier.
3. Membership: Fourteen countries plus the European Union, comprising the United States, Australia, Canada, Finland, France, Germany, Italy, Japan, the Republic of Korea, Norway, Sweden, the United Kingdom, Estonia and India.
4. India’s entry: India joined as a member in June 2023.
5. Instruments: The MSP Finance Network, announced in 2024, coordinates development finance institutions and export credit agencies to fund selected projects.
6. Scope: It covers minerals such as lithium, cobalt, nickel, graphite and rare earth elements across mining, processing and recycling.

Government Initiatives for Critical Minerals and Artificial Intelligence

1. National Critical Mineral Mission, 2025: Exploration, overseas acquisition, recycling and stockpiling of critical minerals, with an outlay of about 16,300 crore rupees.
2. Khanij Bidesh India Limited: A joint venture of three central public sector undertakings created to acquire overseas lithium and cobalt assets.
3. IndiaAI Mission, 2024: Compute infrastructure, an innovation centre, datasets platform, application development and safe and trusted AI, with an outlay of about 10,371 crore rupees.
4. Semicon India Programme: Fiscal support for semiconductor fabrication, display fabrication, assembly and testing units, with an approved corpus of 76,000 crore rupees.
5. National Quantum Mission, 2023: Development of quantum computers, communication and sensing, with an outlay of about 6,003 crore rupees.
6. Critical Mineral Recycling Incentive Scheme: Support for recovery of critical minerals from electronic and battery waste.
7. Production Linked Incentive schemes: Support for advanced chemistry cell batteries, electronics manufacturing and telecom equipment that consume critical minerals.

Key Facts about the Global AI and Minerals Architecture

1. Bletchley Declaration: Signed at the first AI Safety Summit at Bletchley Park in the United Kingdom in November 2023.
2. Seoul Summit: The second AI safety gathering, held in May 2024, produced the Seoul Declaration and frontier safety commitments.
3. Paris AI Action Summit: Held in February 2025, shifting the agenda from safety alone to action and inclusion.
4. Global Partnership on Artificial Intelligence: Founded in 2020; India chaired it and hosted its summit in New Delhi in December 2023.
5. United Nations: The General Assembly adopted its first resolution on safe and trustworthy AI in March 2024, and later established a Global Dialogue on AI Governance and an independent scientific panel.
6. European Union AI Act: Adopted in 2024, the first comprehensive risk based AI statute, with staged application.
7. Minerals Security Partnership: Launched in 2022; India joined in 2023.
8. Quad Critical Minerals Initiative: Announced in July 2025 to diversify supply chains among India, the United States, Japan and Australia.

Challenges in Critical Minerals and AI Capability

1. Refining concentration in one country: Mining diversification does not remove dependence on a single refiner. e.g. China accounts for roughly nine tenths of global rare earth separation capacity.
2. Export controls used as coercion: Supply can be switched off by licence. e.g. China restricted gallium and germanium exports in 2023 and rare earth magnet exports in 2025.
3. Long project gestation: A new mine takes ten to fifteen years from discovery to output, far longer than a policy cycle. e.g. India’s Reasi lithium block failed to attract successful bidders in its first auction rounds.
4. Compute dependence: Advanced AI training depends on imported accelerators subject to foreign export rules. e.g. successive United States rules restricted the export of top end AI chips to several countries.
5. Talent and research gaps: Foundation model research remains concentrated in a few private laboratories. e.g. India’s public compute capacity had to be built by tendering graphics processing units under the IndiaAI Mission.
6. Environmental and social cost of mining: Critical mineral extraction carries tailings, water and displacement burdens. e.g. beach sand mining along the Indian coast has faced litigation on coastal regulation zone violations.
7. Regulatory vacuum for AI harms: India has no dedicated AI statute, so deepfakes and synthetic content are handled under general information technology rules. e.g. Ministry advisories on labelling synthetic media were issued in place of binding legislation.

Way Forward

1. Build midstream capacity, not only mines: Fund separation, refining and magnet manufacturing at home rather than exporting concentrate.
2. Diversify supplier relationships: Deepen mineral agreements with Australia, Argentina, Chile, Zambia and Central Asian states through KABIL rather than a single bloc.
3. Avoid exclusivity commitments: Retain participation in multiple minerals and AI platforms, consistent with strategic autonomy.
4. Create a strategic mineral stockpile: Hold buffer stocks of lithium, cobalt, rare earths and graphite against export control shocks.
5. Scale recycling: Make recovery from electronic waste and spent batteries commercially viable through assured offtake.
6. Expand sovereign compute: Continue public graphics processing unit capacity and domestic foundation model support under the IndiaAI Mission.
7. Legislate for AI transparency: Move from advisories to enforceable rules on synthetic content labelling, provenance and accountability.

Matching Previous Year Question

“[2025] Consider the following statements:
I. India has joined the Minerals Security Partnership as a member.
II. India is a resource-rich country in all the 30 critical minerals that it has identified.
III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals.
Which of the statements given above are correct?
(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III
Answer: (c)”