Malaysia’s rare earths ambition faces curbs as geopolitics muddies waters

The country needs Chinese technology to grow its rare earth industry and yet faces risks of US boycott, a Malaysian minister says

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A mining worker walks past sacks of rare earth concentrate waiting to be shipped to Malaysia, at Mount Weld, northeast of Perth, Australia. Photo: Reuters

Published: 7:30pm, 15 Oct 2024

Malaysia’s ambition to exploit its rare earths reserves worth around US$50 billion is at a crossroads, a minister told This Week in Asia, as plans to establish a domestic supply chain for its minerals hit a snag on the need for Chinese technology and risks of a US boycott due to geopolitical factors.

Prime Minister Anwar Ibrahim last year said Malaysia intended to grab a bigger piece of the lucrative global rare earths market following the discovery of the country’s potential reserves of such minerals.

The Malaysian government last year said the country has up to 16.2 million tonnes of untapped rare earths, with deposits found in Perak and Pahang states and in the north in Kedah, Kelantan and Terengganu.

Rare earths, such as neodymium and samarium, are essential to drive green technologies, including the super magnets used in everything from electric vehicles to wind turbines and smartphones.

Rare earth oxides praseodymium and neodymium in the final stage of production at Lynas’ plant in Malaysia. Photo: Reuters

But the US-China tech war presents a difficult proposition for Malaysia, with local officials determined to control the mining, processing and exporting of the country’s rare earths deposits.