Rare Earth Exchanges

Malaysia Natural Resources and Environmental Sustainability Minister Declares No Need for New Governing Entities to Grow its REE sector

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Highlights

  • Malaysia has substantial rare earth reserves valued at RM747.2 billion.
  • The country seeks to develop downstream processing capabilities.
  • The government plans to leverage existing legal frameworks to regulate the REE industry without creating a new regulatory entity.
  • Malaysia is collaborating with China to advance REE processing technology.
  • The nation aims to reduce illegal ore exports and increase economic autonomy.

Malaysia’s Natural Resources and Environmental Sustainability Minister, Nik Nazmi Nik Ahmad (opens in a new tab), announced that the government has no plans to establish a new entity to regulate the rare earth elements (REE) industry. The Minister emphasized an existing legal framework and the Federal Constitution as sufficient for managing and regulating the industry, as mineral development falls under state jurisdiction.

The minister also encouraged local industries to enhance their competitiveness. This stance aligns with Malaysia’s broader strategy to develop its REE sector sustainably, as outlined in the New Industrial Master Plan 2030, (opens in a new tab) which aims to tap into the country’s estimated 18.2 million tonnes of non-radioactive rare earth reserves, valued at RM747.2 billion.

Rare Earth Exchanges has reported Malaysia has some decisions to make about its relationship with the People’s Republic of China.   

Malaysia possesses substantial untapped reserves of REEs but seek to add more value downstream.  However, the extent to which the southeast Asian nation would complement versus compete against China’s rare earth complex.

Recognizing the strategic importance of these resources, Malaysia has sought to enhance its REE processing capabilities by engaging with international partners, notably China. In March 2024, Malaysia appealed to China for rare-earth processing technology to unlock the potential of its mineral deposits as reported in The Straits Times (opens in a new tab).

This collaboration aims to develop Malaysia’s REE industry and reduce illegal ore exports.

China, as the world’s leading producer of REEs, has a vested interest in maintaining its dominance in the global supply chain. While it has invested in Malaysia’s REE sector and provided technological assistance, China may prefer Malaysia to remain a supplier of raw materials rather than develop its own processing capabilities, which could introduce competition. However, Malaysia’s efforts to build its processing infrastructure indicate a desire to move up the value chain and capture more economic benefits from its natural resources.

In summary, Malaysia’s significant REE reserves and its collaboration with China reflect a strategic move to develop its REE industry. While China’s investments support this development, they may also aim to maintain control over the processing segment of the supply chain. Malaysia’s pursuit of its own processing capabilities suggests an intention to assert greater autonomy in this critical sector.

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