Hightlights

• Malaysia aims to develop a rare earth supply chain amid US-China tensions.
• The nation seeks sustainable partnerships beyond China for rare earth processing.
• Environmental factors are crucial for Malaysia’s rare earth strategy.

• With rare earth mineral reserves worth about US$50 billion, Malaysia’s plans to establish a domestic supply chain have faced delays due to reliance on Chinese technology and geopolitical tensions between the US and China. Substantial reserves have been discovered in Perak, Pahang, and other northern states, fueling aspirations to capitalize on the growing demand for rare earth minerals.
• Pressure on rare earth supply chains has increased as Western governments and firms remold the value chain dynamics. Malaysia’s strategy includes mastering its rare earth supply chain while facing the challenges posed by the US-China “tech war.
• Malaysia intends to scale the value chain by processing mined ores domestically and exporting them as complete products like super magnets. Collaboration strategies are crucial, with the nation considering partnerships with China and other countries while being mindful of the risks of relying solely on Chinese technology.
• Prime Minister Anwar announced a rare earth export ban last year, promoting the establishment of processing and manufacturing plants within Malaysia as part of the vision to build a self-sufficient supply chain.
• Malaysia launched a pilot mine project in Perak with a Chinese firm and proposed processing metals with Australia’s Lynas. The nation continues discussions with China, America, Australia, as well as Japan and South Korea, seeking to form strategic partnerships and negotiate around China’s processing requirements.
• Environmental sustainability is a significant consideration driving Malaysia’s rare earth efforts. The country aims to ensure that its mining practices are sustainable, drawing on past lessons from industries like palm oil.