11-9-2023 (KUALA LUMPUR) Malaysia is set to develop a policy aimed at prohibiting the export of “rare earth raw materials” in order to safeguard against resource exploitation and loss, announced Prime Minister Anwar Ibrahim on Monday.
Despite Malaysia possessing a relatively small fraction of the world’s rare earth reserves, estimated at 30,000 metric tonnes according to 2019 data from the United States Geological Survey, the move is seen as significant. China remains the world’s largest source of rare earth reserves, with an estimated 44 million tonnes.
This decision comes at a time when global efforts are underway to reduce dependence on China, the dominant producer of critical rare earth minerals extensively used in semiconductor chips, electric vehicles, and military equipment.
Prime Minister Datuk Seri Anwar emphasized the government’s commitment to nurturing the rare earths industry within Malaysia, asserting that the export ban would ensure the country maximizes its returns. However, no specific timeline for the implementation of this proposed ban was provided.
Anwar projected that the rare earth industry could contribute up to RM9.5 billion (approximately S$2.8 billion) to Malaysia’s gross domestic product by 2025 and generate nearly 7,000 job opportunities. He outlined plans to create a detailed map of rare earth element sources and establish a comprehensive business model encompassing upstream, midstream, and downstream industries to preserve the rare earth value chain within the country.
Lynas Rare Earths, Australia’s largest rare earths producer outside China, operates a processing plant in Malaysia for the concentrate it produces in Australia. It remains unclear whether Malaysia’s intended export ban will have any implications for Lynas, as the company had not issued an immediate response to inquiries.
Malaysia has previously imposed restrictions on certain processing operations by Lynas, citing concerns about radiation levels stemming from cracking and leaching. In response, Lynas has consistently disputed these allegations, affirming its compliance with regulatory standards.
Additionally, Malaysian authorities have reported incidents of illegal mining of rare earth elements, including within protected forest reserves.
