KUALA LUMPUR: Any development involving strategic national resources including rare earth elements (REE) and other critical minerals will strictly adhere to domestic laws and safeguard national sovereignty, says Tengku Datuk Seri Zafrul Abdul Aziz.
The Investment, Trade and Industry Minister dismissed allegations that Malaysia was compromising its long-standing policy by allowing the export of raw critical minerals to the United States (US) for short-term gains.
"Malaysia will continue to uphold its policy prohibiting the export of raw REE to ensure the development of a domestic downstream industry.
"What does this mean? It means value must be added in Malaysia. High-skilled jobs must be created in Malaysia.
"Processing technology must come into Malaysia. We no longer wish to be a country that merely digs up and ships out cheap raw materials as in the past," he told the Dewan Rakyat.
During the ministerial special briefing on the newly signed reciprocal trade agreement, Tengku Zafrul said the country should not act as a low-value producer of raw materials, as Malaysia is working to build a fully integrated domestic supply chain for the critical minerals sector.
He said the Government also welcomed strategic partnerships with international partners including the US and Australia to accelerate local industry development.
However, Tengku Zafrul stressed that such cooperation must respect local regulations and sovereignty.
"Any development of strategic resources will only take place according to Malaysian laws, on land, under our nation’s control not dictated by the whims of foreign investors," he added.
Tengku Zafrul also clarified that Malaysia does not intend to impose indefinite restrictions on trade but to prevent the export of cheap, unprocessed raw materials so that value-added activities are created in the country.
He said the approach mirrors the oil and gas as well as rubber, cocoa and palm oil sectors in which Malaysia does not prohibit the export of processed products, and the same principle applies to REE and critical minerals.
"Once they are processed domestically according to our laws and standards and only after the value is created here, high-value downstream products may then be exported as part of the global supply chain.
"This is how we ensure high-skilled jobs, processing technology and industrial value remain in Malaysia instead of being extracted as low-cost raw ores.
"In general, all facilitation measures and investments under this agreement will continue to be subject to and implemented in line with national laws and policies," he added.
Tengku Zafrul said such measures will ensure that strategic structures remain protected while strengthening new opportunities for Malaysians and for domestic industries.
"Based on these factors, as well as the flexibilities provided by the US compared to its initial demands, this agreement is viewed as a mutually beneficial consensus supported by various local industry groups.
"All investments and industrial facilitation under the agreement will remain fully aligned with local laws and national policies.
"This is to protect our strategic assets while expanding new opportunities for our people and domestic industries," he said.
The Senator also said the latest trade agreement is beneficial for both countries and is supported by various industry associations.
