Highlights

• Lynas Rare Earths partners with Malaysian state investment arm to explore local ionic clay rare earth deposits
• The strategic development aims to diversify the heavy rare earth element supply outside of China.
• Potential new Malaysian rare earth source could strengthen ASEAN's position in the critical minerals supply chain.

Rare Earth Exchanges (REEx) highlights a strategic development in the global heavy rare earth element (HREE) supply landscape: Lynas Rare Earths Ltd (opens in a new tab) (ASX: LYC) has signed a Memorandum of Understanding with Menteri Besar Inc. (MB Inc.), (opens in a new tab) the investment arm of the Kelantan State Government in Malaysia (opens in a new tab), for future supply of mixed rare earth carbonate (MREC) from local ionic clay deposits.

This development is vital for ex-China HREE diversification, as Malaysia’s ionic clays—similar to those found in Southern China—are naturally enriched in high-demand heavy rare earths such as dysprosium, terbium, and yttrium. These elements are essential for high-temperature permanent magnets in electric vehicles, wind turbines, defense systems, and next-generation electronics.

If definitive agreements follow, this Malaysian feedstock could become a critical input for the Lynas Malaysia Advanced Materials Plant in Kuantan (opens in a new tab), reinforcing Lynas’s position as the leading non-Chinese rare earth processor. It also signals an emerging ASEAN-centered HREE supply node, counterbalancing Chinese dominance and enhancing regional resilience.

This MoU, while non-binding, represents a strategic alignment between Lynas’s proven processing capabilities and Malaysia’s untapped HREE resource base. For investors, manufacturers, and policymakers focused on supply chain security, this move is a significant step toward building a reliable, ESG-aligned ex-China HREE pipeline.

REEx will continue to monitor developments as definitive agreements progress and Malaysia’s ionic clay sector matures.  Note, Lynas Rare Earths remains number one on the REEx NdPr rankings.