KUALA LUMPUR: Malaysia has agreed to ease its moratorium on raw rare earth exports under strict conditions to attract investors and encourage the development of domestic processing facilities, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani announced.
The minister said the flexibility would be limited to research and development (R&D) activities, with participating companies required to commit to developing processing facilities in Malaysia within three years of receiving export approval.
He said the move was necessary as potential investors remained reluctant to enter Malaysia's rare earth elements (REE) industry without assurances of a stable domestic raw material supply.
"To attract these potential REE investors, the government has agreed to provide flexibility under the existing moratorium on raw REE exports through the Guidelines for Consideration of Applications for Raw Rare Earth Exports.
"This export flexibility is limited to R&D activities only.
"Companies concerned must demonstrate a clear commitment to collaborating on the development of processing facilities in Malaysia within three years from the date of approval for raw REE exports," he said.
He said this in a written parliamentary reply to Shaharizukirnain Abd Kadir (PN-Setiu), who asked about the government's position on a US$96mil (RM388mil) rare earth oxide supply agreement between Australia's Lynas Rare Earths Ltd and the Pentagon.
Johari said Miti was prioritising investments in the midstream and downstream segments of the REE industry to maximise the economic value of Malaysia's mineral resources.
"Miti's strategy focuses on attracting domestic and international investments to develop and further strengthen the midstream and downstream segments of the REE industry.
"This is particularly in high-technology manufacturing such as permanent magnets, advanced materials, electronic components and batteries," he said.
Johari said Lynas Malaysia had clarified that the arrangement was a commercial matter handled directly by its subsidiary, Lynas LLC USA, and the American authorities.
"The company also informed us that the rare earth oxides supplied are intended for R&D in the permanent magnet manufacturing industry currently being explored by the United States," he said.
He explained that Lynas Malaysia operated at the early processing stage, separating raw rare earth materials mined in Australia into rare earth oxides for overseas metal manufacturers.
The resulting materials are subsequently supplied to magnet producers, with the finished magnets used in electric motors and other manufactured products, he added.
Johari said Lynas Malaysia's operations complied with existing government policies, including licensing requirements and environmental impact assessment approvals.
"Malaysia needs to leverage strategic cooperation and technology transfers from domestic and international partners, including countries experienced in REE processing, to realise its aspirations of developing the industry.
"This will strengthen domestic capabilities across the entire value chain, from mining activities to the manufacturing of finished products.
"It will also position Malaysia as an important player in the global critical minerals supply chain," he said.
