Kuala Lumpur
Malaysia is planning to establish a policy that will prohibit the export of rare earth raw materials, a move aimed at preventing the exploitation and loss of these valuable resources.
While Malaysia holds only a small fraction of the world’s rare earth reserves (estimated at 30,000 metric tons), the decision reflects a broader global trend to reduce dependence on China, which dominates the production of rare earth minerals. Rare earths are critical components used in various high-tech applications, including semiconductor chips, electric vehicles, and military equipment.
Malaysian Prime Minister Anwar Ibrahim emphasized the government’s support for developing the rare earth industry within the country, stating that a ban on exports would ensure maximum returns for Malaysia. However, he did not specify when the proposed ban would take effect. The rare earth sector is expected to contribute significantly to Malaysia’s GDP, potentially contributing up to 9.5 billion ringgit ($2 billion) and creating nearly 7,000 job opportunities by 2025. To facilitate the development of the rare earth industry, Malaysia plans to conduct detailed mapping of rare earth sources and establish a comprehensive business model encompassing upstream, midstream, and downstream industries. This approach aims to maintain the entire rare earth value chain within the country.
The proposed export ban could impact sales to China, as China imported approximately 8% of its rare earth ores from Malaysia between January and July of the current year, according to China’s customs data. Malaysia joins a growing list of countries seeking to safeguard and expand their rare earth resources to reduce reliance on a single dominant supplier.
