Key facts
- Malaysia is considering easing its ban on unprocessed rare earth exports.
- The country aims to strengthen its position in the global critical minerals supply chain.
- Foreign investment and technology transfer will be conditions for any export relaxation.
- Malaysia seeks to establish itself as a regional critical minerals hub by 2030.
- Growing international demand and concerns over China's export controls are driving the review.
Malaysia is contemplating easing its restrictions on the export of unprocessed rare earths as global demand for critical minerals intensifies and countries seek to diversify supply chains away from China. The Southeast Asian nation, which imposed a moratorium on raw rare earth exports in 2024 to encourage domestic processing, is now assessing the feasibility of allowing conditional exports.
Deputy Minister of Natural Resources and Environmental Sustainability Syed Ibrahim Syed Noh stated that any relaxation of export curbs would be contingent upon foreign investment commitments and technology transfer aimed at developing Malaysia's domestic rare earth industry. He indicated that exported materials would likely be designated for research and development activities outside Malaysia, though a timeline for policy changes remains unspecified.
This policy review is prompted by significant interest from countries including the United States, Australia, France, and India, who are actively seeking alternative sources for critical minerals amidst concerns over potential export controls from China. Malaysia's strategic goal is to establish itself as a regional hub for critical minerals by 2030, thereby mitigating the risks associated with over-reliance on a single supplier.
Malaysia currently accounts for approximately 1% of global recognized rare earth reserves, a stark contrast to China's over 50%. However, the government believes that by enhancing its domestic processing capabilities, the country can secure a stronger position in global critical mineral supply chains. The nation already hosts Lynas Rare Earths' expanding processing facility, which processes ore imported from Australia, and is attracting interest from other entities like Malaysian conglomerate Berjaya Corp Bhd and France's Carester SAS for new projects.
The government estimates Malaysia holds about 16.1 million tonnes of inferred rare earth reserves, valued at approximately MYR970 billion (USD 237 billion). Efforts are underway to map these deposits, many of which are located within protected forest areas, while exploring extraction methods that minimize environmental impact.