Malaysia mulls easing rare earth export curbs to meet demand

Malaysia is contemplating easing export restrictions on unprocessed rare earths to enhance its role in the supply chain catering to sectors like automotive, defense, and consumer goods. The nation imposed a moratorium on raw rare earth exports in 2024 to encourage domestic processing, a common approach for resource-rich developing nations.

However, authorities are now evaluating the possibility of relaxing these curbs as demand for the minerals intensifies, according to a senior government official. Deputy Natural Resources and Environmental Sustainability Minister Syed Ibrahim Syed Noh revealed to Bloomberg News that Malaysian states and investors are already pressuring authorities to reconsider the restrictions.

Beijing instigated a global scramble for rare earths last year by imposing export controls due to a trade war with the US. Nations possessing substantial reserves are exploring strategies to capitalize on this trend, and the US signed a critical minerals pact with Malaysia during a visit last year. Malaysia currently plays a significant global role as the host of Australia’s Lynas Rare Earths Ltd refinery, one of only two major producers outside China.

The facility receives ore from Australia but is increasingly attracting interest from Malaysia’s untapped rare earth deposits. Any renewed exports would be contingent on conditions such as tying to inbound investments and technology transfers, Syed Ibrahim stated. The government aims to reduce reliance on technology from a single source through diversification.

Malaysia is on track to become a regional hub for critical minerals by 2030 and is seeking investments across the value chain, including mining and downstream plants. Despite having only 1% of the world's rare earth reserves compared to China's over 50%, the country has attracted considerable attention from foreign miners and refiners.

Apart from Lynas, local conglomerates like Berjaya Corp Bhd are exploring projects. French company Carester SAS plans to build a rare-earths separation plant in Malaysia's Perak state in a joint venture with the Malaco Mining Group. While China's involvement in mining and processing has yielded limited success, Syed Ibrahim emphasized the government's commitment to engaging with Chinese companies due to their technological advantage.

Malaysia possesses 16.1 million tonnes of inferred rare earth reserves, worth approximately RM970 billion, with most deposits located within protected forest areas. The government is currently mapping and researching methods to extract minerals without harming biodiversity.