Think tank outlines way forward for rare earths in new policy brief

In 2023, the Dewan Rakyat was told that the minerals and geoscience department had found 16.1 million tonnes of non-radioactive rare earth elements in Malaysia with a market value of RM809.6 billion. (Facebook pic)PETALING JAYA: Despite having significant deposits and an existing refining industry, Malaysia risks wasting its rare earth potential if it fails to tackle deep structural problems in the sector, a think tank says in a new policy brief.In 2023, the Dewan Rakyat was told that the minerals and geoscience department had found 16.1 million tonnes of non-radioactive rare earth elements in Malaysia with a market value of RM809.6 billion.Institute of Strategic and International Studies (Isis) Malaysia analyst Qarrem Kassim today said that only 18% to 19% of Malaysia’s inferred rare earth deposits could be mined, as many lie in environmentally sensitive areas and permanent forest reserves.Qarrem, the lead author of Isis Malaysia’s “From Mine to Magnet: Positioning Malaysia in the Emerging Global Supply Chain” policy brief, said federal–state coordination issues, unclear rules, a weak downstream industry and research conducted in silos were other factors that could see the country’s rare earth potential go to waste.Deputy investment, trade and industry minister Liew Chin Tong, in his keynote address during the launch of the policy brief, said Malaysia must stop seeing itself as merely a raw material exporter and instead build a full rare earth industrial chain from upstream mining to downstream manufacturing.He said Putrajaya’s decision to ban the export of raw rare earths was only the first step in a “journey of a thousand steps”, and that stronger institutions, better federal–state coordination, the right incentives, and active participation from GLCs were needed to develop an integrated ecosystem.Qarrem said the urgency for reform was heightened by the fact that while mining is more geographically dispersed, over 90% of global rare earth separation, refining and magnet production are controlled by a single supplier, creating serious vulnerabilities for other economies.Malaysia itself remains dependent on imported processing chemicals, meaning that the country cannot insulate itself from external shocks and must instead focus on building resilience within an interconnected supply chain, he said.To fix these issues, the policy brief said Malaysia needed a clearer and more coordinated system, starting with strengthening the special task force on rare earth elements so it can properly bring together federal agencies, state governments and the industry.The brief also said the government should build industrial zones where mining, refining and magnet-making facilities are located together, supported by the necessary chemicals and shared infrastructure.Qarrem said a unified centre of excellence should coordinate rare earth research and development across universities and institutes, while formal pathways for exploration funding and venture capital are needed to expand geological mapping and unlock new deposits.On the environmental front, the brief said that ESG standards, social trust and sustainability must be central to the sector’s development, including by embedding free, prior and informed consent in community engagement and adopting a robust traceability framework to verify the provenance of materials.It also proposed a circular economy framework for residue and waste management so that by-products from mining and processing can be recovered and reused, creating additional value and new green jobs.Isis Malaysia chairman Faiz Abdullah said the old efficiency-driven model of globalisation had given way to the “weaponisation of economic interdependence”, making secure supply chains and strategic control more important than ever.He described Malaysia as a “trusted, rules-based and capable node” in a volatile global order, and said the country must move “from mine to magnet, and from magnet to global market” through strong governance, industrial upscaling, research and international cooperation.Australian high commissioner to Malaysia Danielle Heinecke welcomed the policy brief, noting that Malaysia was already the world’s second-largest producer of refined rare earths and the only producer of heavy rare earths outside China.Heinecke also said Australia was keen to support Malaysia’s efforts to build a sustainable, full-cycle rare earth industry.

MatchPoint Times

Think tank outlines way forward for rare earths in new policy brief

The ‘Mine to Magnet’ policy brief highlights limited mineable reserves, governance gaps, and supply chain risks, urging Malaysia to develop a complete rare earth ecosystem.

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