Malaysia considers easing rare earth export curbs amid rising global demand

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Malaysia is considering easing its restrictions on exports of unprocessed rare earths as global competition for critical minerals intensifies, with the government assessing whether conditional exports could strengthen the country's position in the international supply chain while continuing to promote domestic value addition.

The Southeast Asian nation imposed a moratorium on exports of raw rare earths in 2024 to encourage greater investment in local processing. However, growing interest from countries including the United States, Australia, France and India has prompted authorities to review whether limited exports should be allowed under specific conditions.

Deputy Minister of Natural Resources and Environmental Sustainability Syed Ibrahim Syed Noh said the government is evaluating the feasibility of adjusting the current policy in response to increasing international demand. 

Exports could be linked to investment and technology transfer

According to Syed Ibrahim, any relaxation of export restrictions would be conditional on foreign investment commitments and technology transfer that support the development of Malaysia's domestic rare earth industry.

He added that exported materials should be used for research and development activities outside Malaysia, while declining to provide a timeline for any policy changes.

"The pressure is already there, from Malaysian states and investors," Syed Ibrahim said. "They are knocking at the doors already," referring to interest from the US, Australia, France and India.

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Malaysia targets stronger role in critical minerals supply chain

The government said diversification remains central to its strategy as it seeks to establish Malaysia as a regional hub for critical minerals by 2030.

"Diversification is particularly important," Syed Ibrahim said. "We want to mitigate the risk of over-reliance on technology from a single source."

Malaysia is seeking investments across the entire rare earth value chain, from mining and refining to downstream processing, as countries continue to diversify supply sources following China's export controls on rare earth minerals introduced during its trade dispute with the United States.

Malaysia already hosts the expanding rare earth processing facility operated by Australia's Lynas Rare Earths, one of the few major rare earth producers outside China. While the refinery currently processes ore imported from Australia, interest is growing in developing Malaysia's own rare earth resources.

Growing investment interest supports industry expansion

Malaysia's rare earth sector has attracted increasing attention from both domestic and international companies.

Alongside Lynas, Malaysian conglomerate Berjaya Corp Bhd is exploring rare earth projects, while France's Carester SAS plans to establish a rare earth separation plant in the northern state of Perak through a joint venture with Malaco Mining Group.

Although Malaysia accounts for only about 1 per cent of global recognised rare earth reserves, compared with more than 50 per cent in China, the government believes the country can strengthen its position within global critical mineral supply chains by expanding domestic processing capabilities.

Government balances resource development with environmental protection

Malaysia estimates it holds 16.1 million tonnes of inferred rare earth reserves, which the government has previously valued at around MYR970 billion (USD 237 billion).

Much of the country's rare earth resources are located within protected forest areas, prompting authorities to map deposits while studying extraction methods that minimise impacts on biodiversity.

The government said it will continue engaging with international partners, including Chinese companies, to access advanced processing technologies as it develops its long-term critical minerals strategy.

"If China wants to share the technology, it would be a win-win for all of us," Syed Ibrahim said.

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