Malaysia’s rare earth moment

MALAYSIA has signalled a willingness to review its moratorium on rare earth element exports as it seeks to develop its rare earth deposits.

Bloomberg News quoted Deputy Natural Resources and Environmental Sustainability Minister Syed Ibrahim Syed Noh as saying that authorities are assessing whether to ease the restrictions, which have been in place since 2024, amid pressure from state governments.

He added that there were also calls from investors from India, the United States, France and Australia to access the country’s 16.2 million tonnes of known reserves.

Most of these nations are seeking to diversify their sourcing options away from China, which has imposed export restrictions that have tightened global rare earth element supplies.

If Putrajaya does loosen its policy stance, it will not amount to full export liberalisation. Any export approvals are expected to require binding commitments for capital investment in domestic processing facilities.

There will also be technology transfer obligations to build local capabilities, along with environmental compliance requirements, particularly near protected forest zones where most of the reserves have been identified.

The New Industrial Master Plan 2030 values Malaysia’s rare earth elements resources at RM747.2bil, with the potential to attract RM100bil in investments and create 4000 job opportunities.

Apart from Lynas Rare Earths Ltd’s facility in Pahang, only French company Carester SAS has announced plans to build a rare earth separation plant ​in Perak as part of its 10-year joint venture with local miner ‌Malaco Mining Group.

The partnership also includes the offtake of some concentrate produced for Carester’s operations in France.

No Chinese involvement in the sector has been secured despite offers being made.

This conditional policy tweaking may be what is needed to attract the foreign technology and capital required to monetise Malaysia’s deposits. Not doing anything may no longer be an option.

However, the government must ensure that any investment will not turn out like the controversial Asian Rare Earth processing plant in Bukit Merah, Perak, which was shut down after years of public protests over radioactive waste management issues and health concerns.