REE export curbs can help Malaysia move up value chain, say experts

Malaysia's government has imposed a moratorium on raw non-radioactive rare earth element (REE) exports, aiming to foster the development of local midstream processing and downstream manufacturing industries. Experts believe this move could enable Malaysia to capture higher value from REE, although it must be accompanied by the establishment of domestic processing and manufacturing capabilities.

Universiti Kebangsaan Malaysia’s Idzat Idris explained that restricting raw REE exports could stimulate local processing and manufacturing, leading to the production of valuable products such as alloys, high-performance magnets and advanced materials used in various industries, including electric vehicles and wind turbines. However, without robust local technology and processing capacity, the moratorium could result in stockpiling, weakened prices for miners, illegal exports, or excessive dependence on foreign technology providers or buyers.

Environmental economist Norlida Hanim Salleh pointed out that the moratorium could prevent Malaysia from repeating its past mistakes with other mineral resources, such as tin, where most value was generated post-export. The Science, Technology and Innovation Ministry is collaborating with researchers and industry stakeholders to develop local REE technology and commercialize research outcomes.

The ministry has prioritized advanced separation processes, magnet recycling, and greener extraction methods. Additionally, the government is establishing facilities like Terra Mineral Lab and Malaco Mining's pilot plant to support the sector's development. Industry consultant Teoh Lay Hock suggested allowing limited raw REE exports while developing domestic processing capacity and gradually reducing restrictions as demand grows.

Norlida emphasized that foreign partnerships are necessary but should be structured to ensure meaningful local participation and measurable technology transfer. Effective enforcement of environmental impact assessment requirements and strict monitoring of mining activities are also crucial to ensure sustainable REE mining practices in Malaysia.