SUNY Albany Maps Malaysia's Rare Earth Supply Chain: Great Powers Era 2.0 Explains What Comes Next

Highlights

• Malaysia holds an estimated 16.2 million tonnes TREE of inferred rare-earth resources but lacks a domestically integrated upstream-to-downstream chain.
• Lynas Rare Earths' Gebeng facility gives Malaysia commercial-scale separation outside China, its strongest strategic industrial asset.
• The study recommends a centralized national-security investment screening mechanism to close the gap between export controls and ownership security.
• Federal-state jurisdictional conflict over land, mineral rights, and royalty structures creates a fragmented investment environment for rare-earth developers.
• Foreign-operated technology on Malaysian soil does not equal Malaysian technological sovereignty—a core tension the report highlights but underexplores.

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A 59-page May 2026 study by Hiu Dilangit Sasongkojati (opens in a new tab) at the time at Project on International Security, Commerce, and Economic Statecraft (PISCES) at the Center for Policy Research, University at Albany, SUNY (opens in a new tab), offers an unusually comprehensive map of Malaysia's emerging rare-earth ecosystem. Its central conclusion: Malaysia possesses pieces of an upstream-midstream-downstream chain, but they remain fragmented, dependent on foreign technology, and exposed to U.S.-China competition. Its most original contribution is not geology. It connects industrial capacity, strategic trade controls, and foreign-investment screening into one economic-security architecture.

REEx Insight — Great Powers Era 2.0™ Arrives in Academic Form

Sasongkojati effectively describes (opens in a new tab) the Rare Earth Exchanges® Great Powers Era 2.0™ without using the term. Rare Earth Exchanges defines Great Powers Era 2.0 as the transition from globalization optimized principally for efficiency toward a system where resilience joins efficiency, and supply chains, technology, and industrial capacity become instruments of national power. Competition increasingly occurs ecosystem versus ecosystem—mine, separation, metals, alloys, magnets, capital, technology, regulation, and customers.

Sasongkojati independently arrives at remarkably similar terrain. He maps Malaysia across upstream, midstream, and downstream segments (like we do at REEx), then overlays technology dependence, foreign ownership, export controls, ESG, federal-state conflict, and geopolitical competition.

REEx has applied this framework specifically to Malaysia in Great Powers Era 2.0 Arrives in Malaysia, Mine to Magnet—or Magnet to Mine? and Malaysia Courts China for Rare Earth Processing Know-How. Those analyses argued respectively that the strategic contest is migrating toward the midstream; downstream demand can pull investment upstream; and foreign-operated technology located in Malaysia is not necessarily Malaysian technological sovereignty.

The report instead acknowledges Malaysian officials, academics, Lynas representatives, and U.S. State Department personnel; the research was funded partly through a State Department grant or cooperative agreement.

What is significant is the independent convergence toward systems-level supply-chain analysis.

Malaysia Has Molecules—But Not Yet a Malaysian Chain

Malaysia estimates roughly 16.2 million tonnes TREE of inferred resources/potential, concentrated heavily in Terengganu, Kelantan, Perak, Kedah, and Pahang. Investors should resist calling these bankable reserves. Sasongkojati himself stresses that drilling, resource classification, and technical work are necessary to bridge geological potential and commercial viability.

Malaysia's ionic-adsorption clays are strategically intriguing because of their reported magnet and heavy-REE content. Yet the paper illustrates the central problem: domestic resources do not automatically create domestic capability.

Its detailed upstream mapping identifies MCRE Resources (owned majority by Southern Alliance Mining) in Perak as using China Rare Earth Corporation technology rights, with material moving to China for further processing. The paper is internally inconsistent on MCRE's ownership elsewhere, however, so investors should treat its corporate description cautiously.

And this is the Great Powers Era 2.0 paradox in miniature: Malaysia may own the molecules while somebody else owns the chemistry.

Lynas Gives Malaysia Something Most Countries Lack

Malaysia's strongest strategic card is not geology. It is existing industrial infrastructure. Lynas Rare Earths' Gebeng operation provides commercial-scale separation outside China. Sasongkojati highlights NdPr alongside emerging Dy, Tb, and Sm production and identifies Malaco Group (opens in a new tab) and SG4 (opens in a new tab) (economic coordination platform for four Malaysian states) as developing Malaysian midstream participants.

Downstream, Shin-Etsu Malaysia manufactures rare-earth permanent magnets, while Bomatec produces magnet solutions. Yet the report says these operations largely depend upon imported processed metals. Thus Malaysia already possesses pieces of all three stages—but not yet one domestically integrated chain. That distinction is crucial. A collection of factories is not necessarily an ecosystem.

The Research Breakthrough — Who Controls the Chain?

Here Sasongkojati makes his strongest contribution. Most critical-mineral studies ask: Where are the minerals? Who processes them? This report adds another question: Who should Malaysia permit to own and control the infrastructure? Malaysia's Strategic Trade Act 2010 can regulate specified strategic goods and technologies leaving the country. But Sasongkojati finds its inbound investment regime fragmented and primarily oriented toward economic development rather than systematic national-security review.

He therefore pairs two mechanisms. Strategic Trade Controls address what sensitive materials and technology can leave Malaysia. Investment Security Regulations address who can acquire, influence, or control strategic Malaysian assets.

The distinction is powerful: export security without ownership security can leave the same strategic vulnerability through a different door. The author recommends a centralized national-security screening mechanism capable of mitigating—or ultimately blocking—foreign investments presenting unacceptable risks.

Thirteen States, One National Ambition

The paper also exposes a frequently overlooked investment risk: Malaysia is not one mineral jurisdiction in practice. States control land and mineral rights; Kuala Lumpur controls important environmental, industrial, and trade policies. The report identifies REE royalty structures including 12% in Perak, 10% in Pahang, and 15% in Kedah, while documenting tension between state revenue ambitions and federal plans for downstream industrialization.

Great Powers Era 2.0 therefore operates both around and inside Malaysia: state resource sovereignty, federal industrial policy, Chinese technology, Australian processing, Japanese and Korean manufacturing, Western capital, and environmental politics compete over the same value chain.

What Sasongkojati Still Leaves Unmapped

The study's greatest weakness for investors is commercial economics. It says relatively little about separation costs, capex, recoveries, reagent intensity, metallization, alloy production, magnet qualification, or whether Malaysian ionic-clay feedstock can compete economically against China's integrated system.

More importantly, “technology transfer” is treated too broadly. Rare-earth capability is not one technology. Mining ionic clays, separating Dy/Tb, producing high-purity oxides, reducing oxides to metal, alloying, and manufacturing qualified sintered NdFeB magnets are different industrial moats.

REEx has repeatedly emphasized this distinction. Our Malaysia analysis argues that operating foreign IP on Malaysian soil is fundamentally different from developing engineers, process knowledge, and intellectual property that Malaysia can independently operate, modify, and reproduce.

The report also underdevelops metallization, arguably one of the most consequential missing links between separated oxide and magnet. Nor does it sufficiently differentiate strategic basket value: Dy- and Tb-bearing feedstock carries very different geopolitical importance from predominantly La/Ce material, and of course what about the more exotic heavies such as yttrium, which certain Malaysian assets are purported to possess in substantial quantity? Separating select heavies economically becomes an even greater economic quandary, reports Rare Earth Observer.

REEx Assessment — Malaysia Is Becoming a Laboratory for the New World Order

Sasongkojati has not discovered new geology or invented new separation chemistry. His contribution is arguably more important for policymakers: he connects geology, processing, manufacturing, ownership, technology, environmental legitimacy, trade controls, and national security as one interdependent system.

That is precisely what makes Malaysia so consequential. It could become an industrial bridge connecting Australian feedstock, Malaysian ionic clays, Malaysian separation infrastructure, Japanese and Korean magnet expertise, American capital and entrepreneurial forces, and ex-China heavy-REE demand. Or it could possess resources, factories, and foreign investment while remaining dependent on technologies and markets controlled elsewhere. The distinction defines Great Powers Era 2.0.

Owning the critical materials matters. Processing them matters more. But ultimately, strategic power belongs to those who can control, reproduce, and defend the entire industrial ecosystem.

Follow the link to read the study (opens in a new tab).