Highlights
- Malaysia aims to keep rare earth value at home by restricting raw material exports and encouraging mid- and downstream processing investments.
- Lynas has an exploratory MoU in Kelantan, not active mining, contrary to media claims about its current operations.
- The export ban is still a policy direction awaiting official gazette, with specific legal definitions and thresholds yet to be finalized.
Malaysia’s message today seems blunt: keep the value at home. Today’s New Straits Times (NST) piece (opens in a new tab) touts a ban on exporting unprocessed rare earths and urges investors into Malaysia’s mid- and downstream lanes—exactly the policy trajectory Kuala Lumpur has signaled since 2023. But it also trips on a key fact: Lynas separates oxides at its LAMP facility in Gebeng, Kuantan; it is not yet mining in Kelantan—the mid-2025 MoU there is exploratory, not evidence of active extraction. The underlying “Squawk Box Asia” interview shows intent and positioning, not a published rulebook; until Putrajaya gazettes the operative definitions and thresholds, treat the “ban” as policy direction rather than settled law. REEx’s starting point: downstream push = real, Lynas-in-Kelantan claim = wrong, and the legal mechanics still need ink.
Rare Earth Exchanges (REEx) starts its analysis of today’s NST piece on Malaysia with the bedrock. Malaysia’s recent policy direction is clear: keep value at home by curbing exports of raw rare earths and pushing investors into mid- and downstream processing. That stance was telegraphed in 2023 by the prime minister and trade officials and widely reported at the time.
Lynas’s role in this ecosystem is also straightforward on one point: its Lynas Advanced Materials Plant (LAMP) sits in Gebeng, Kuantan (Pahang), where it separates rare earth oxides.
Where the story smears
The piece authored by Diyana Isamudin claims Lynas is “mining in Gua Musang, Kelantan.” Actually, in mid-2025, Lynas signed an MoU with Kelantan’s state investment arm (MB Inc Kelantan) to explore collaborative development and potential future supply of mixed rare earth carbonate (MREC)—a forward-looking cooperation, not proof of active mining by Lynas in Kelantan. See Lynas Rare Earths report (opens in a new tab).
The underlying news comes by way of an interview on “Squawk Box Asia”, (opens in a new tab) a US-based CNBC show with guest, the Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Aziz (opens in a new tab), announcing the policy. The minister notes the U.S. is the largest export market and emphasized engagement over retaliation with the USA.
Semis, Tariffs, and Malaysia’s 2030 Playbook
Asked whether new U.S. tariff measures under President Trump are crimping Malaysia’s Industrial Master Plan 2030—especially its semiconductor push—the minister acknowledged short-term disruption and added nuance: the past six months have been bumpy, but Southeast Asia remains a pivotal node in the global chips ecosystem and Malaysia intends to stay in the flow.
Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Aziz
Semiconductors matter in Malaysia—economically and politically. Malaysia’s chip supply chain supports an estimated ~100,000 direct jobs, with far more indirectly. With deeper vertical integration, officials peg the potential at ~200,000 jobs across assembly, test, packaging, equipment, chemicals, and logistics.
Media note: in the referenced Squawk Box Asia clip, there was no mention of rare earths. (Link provided by the user.)
According to NST, the Minister went on the record, "Whatever has been mined cannot be exported unless it goes through the midstream and downstream part of the activities.” He continued, according to the Malaysian press: "What we are doing now is inviting all companies to come to Malaysia and to be part of the supply chain to invest in the downstream activities of rare earth and then export the value-added products.”
Please Provide Receipts
Today’s piece states Malaysia “has imposed a ban on the export of unprocessed rare earths.” Policy intent is well-documented; what we couldn’t locate was a publicly available, up-to-date legal instrument (e.g., gazette/ministerial order) showing the ban is fully in force as of August 2025 and spelling out what counts as “unprocessed.” Readers should treat this as a credible direction, not yet a fully evidenced execution, unless and until the government publishes the operative rules.
The piece also suggests exporters like Lynas are “allowed to export after processing.” That’s consistent with a raw-materials export curb, but we haven’t found the specific Malaysian regulation confirming processed-vs-unprocessed thresholds, permits, or HS-code lines. Consider this a reasonable inference, not a verified rulebook.
The minister’s message about engaging both the U.S. and China aligns with Malaysia’s long-standing “trade with all” posture. It’s a framing choice that underscores investment outreach; it’s not evidence of new binding commitments or exemptions.
Why investors should care
- Directionally true: Malaysia is steering capital into processing, not raw exports.
- Overreach corrected: Lynas isn’t mining Kelantan; it has an MoU to study potential supply.
- What to watch: the final text of any export controls (definitions, licensing, carve-outs) and whether state-level projects in Kelantan mature under stricter federal oversight.
Bottom line
The recent NST piece captures Malaysia’s strategic tilt, but it blurs a key line on Lynas’s activities and treats a likely-but-not-yet-verified ban implementation as a done deal. Keep your eyes on the gazette, not just the headlines. Rare Earth Exchanges is reaching out to the Malaysian ministry.
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