Highlights

• Malaysia and South Korea agree to develop a 3,000-tonne NdFeB super magnet facility in Pahang, partnering Lynas with JS Link to expand local rare earth capabilities.
• PM Anwar Ibrahim defends Malaysia's independence under the US Reciprocal Trade Agreement, emphasizing simultaneous cooperation with China and South Korea.
• Malaysia holds 16.1 million tonnes of REE worth RM800 billion but faces technology gaps, forcing reliance on foreign partnerships to convert resources into industrial leverage.

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Malaysia’s latest rare earth maneuver reads like a diplomatic balancing act worthy of ASEAN intrigue. Prime Minister Anwar Ibrahim told Parliament this week that Kuala Lumpur and Seoul have agreed to expand collaboration on local rare earth production—an announcement aimed squarely at critics claiming Malaysia is beholden to the United States under its new Reciprocal Trade Agreement (ART).

“This is not true,” Anwar declared, adding that negotiations in South Korea had already led to instructions for Malaysian GLCs to co-develop an additional “super magnet” facility in Pahang with Korean partners, reports the Malay Mail (opens in a new tab). The deal reportedly builds on the July memorandum between Lynas Rare Earths Ltd and South Korea’s JS Link, which targets 3,000 tonnes of neodymium-iron-boron (NdFeB) magnets annually near Lynas’s Kuantan facility.

Malaysia’s Balancing Act: Between Washington and Beijing

Anwar’s message was clear: Malaysia won’t be cornered into a single supply chain orbit. While the U.S.-Malaysia ART includes clauses discouraging export restrictions on rare earths to America, the Prime Minister emphasized ongoing cooperation with China, including potential projects with Khazanah Nasional Berhad and Premier Li Qiang.

This triangulation—simultaneously deepening ties with Seoul, Washington, and Beijing—reveals Malaysia’s pragmatic approach. With an estimated 16.1 million tonnes of non-radioactive REE worth over RM800 billion, Malaysia seeks to convert resource wealth into industrial leverage. But, as REEx notes, the technology gap remains the Achilles’ heel—Malaysia lacks indigenous processing expertise, forcing reliance on foreign capital and know-how.  As discussed earlier this morning, China may be on the verge of working with the nation’s sovereign wealth fund to establish a processing deal, however.

Between Pragmatism and Overreach

The magnet partnership with JS Link and Lynas is well-documented, and Malaysia’s REE resource estimates align with MITI data. The Prime Minister’s statements mirror official reports from Bernama and Reuters. However, Anwar’s claim that the new Pahang facility is already underway lacks published investment details or environmental disclosures. Assertions of “no restriction” on exports under the ART omit the nuanced language limiting certain policy tools. Malaysian media tilt toward framing Anwar’s policy as sovereign assertiveness, glossing over long-term dependency risks tied to Chinese and Korean technology.

For investors, Malaysia’s message is both alluring and cautionary: the country is open for business—but its rare earth future will be forged through partnerships it cannot yet fully control.

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