KUALA LUMPUR: Any development involving strategic national resources, including rare earth elements (REE) and other critical minerals, will have to 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 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 to 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 yesterday.
During the special ministerial briefing on the newly signed reciprocal trade agreement, Tengku Zafrul said the country is working to build a fully integrated domestic supply chain for the critical minerals sector and welcomed strategic partnerships with foreign partners, including the United States and Australia, to accelerate local industry development.
However, Tengku Zafrul stressed that such cooperation must respect Malaysian 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 unprocessed raw materials so that value-added activities are created in the country.
He said that this approach is similar to that of the oil and gas sectors, along with rubber, cocoa, and oil palm, where Malaysia allows the export of processed products. The same principle will be applied 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 that these measures will safeguard strategic structures while simultaneously creating new opportunities.
“Based on these factors, as well as the flexibility provided by the United States 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 the local laws and national policies. The intent is to protect our strategic assets while expanding new opportunities for our people and domestic industries,” he said.
