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SHAH ALAM – Malaysia is considering relaxing its ban on exports of unprocessed rare earth minerals as it seeks to strengthen its position in the fast-growing global critical minerals supply chain.
According to a Bloomberg report, Natural Resources and Environmental Sustainability deputy minister Syed Ibrahim Syed Noh said the government is studying whether limited exports of raw rare earths could be allowed under strict conditions, following growing interest from foreign investors.
"The pressure is already there, from Malaysian states and investors. They are knocking at the doors already," he told Bloomberg, referring to interest from countries including the United States, Australia, France and India.
Malaysia imposed a moratorium on exporting raw rare earth minerals in 2024 to encourage companies to invest in domestic processing instead of shipping out unprocessed resources.
The move formed part of the country's broader strategy to create more value locally by expanding downstream industries rather than relying solely on mineral extraction.
However, the global race for critical minerals has intensified since China introduced export controls on rare earths during its trade dispute with the United States, prompting countries to diversify their supply sources.
The Bloomberg report also stressed that any decision to ease Malaysia's export restrictions would come with conditions aimed at benefiting the local economy.
Syed Ibrahim said exports would likely be linked to investment commitments and technology transfers into Malaysia, while any exported materials should primarily support research and development activities overseas.
He did not indicate when the government would decide on possible changes to the export policy.
The deputy minister said Malaysia aims to become a regional hub for critical minerals by 2030 and is looking to attract investments across the entire supply chain, from mining operations to processing facilities and downstream manufacturing.
"Diversification is particularly important. We want to mitigate the risk of over-reliance on technology from a single source," he told Bloomberg.
Malaysia is already home to one of the world's few major rare earth processing facilities outside China through Australian miner Lynas Rare Earths Ltd.
The refinery currently processes ore imported from Australia, although interest is growing in developing Malaysia's own rare earth resources.
Companies including Lynas, local conglomerate Berjaya Corporation Bhd and France-based Carester SAS have expressed interest in rare earth projects in Malaysia.
While Chinese participation in Malaysia's mining sector has been relatively limited, Syed Ibrahim said Putrajaya remains open to working with Chinese companies because of their extensive technological expertise.
"If China wants to share the technology, it would be a win-win for all of us," he said.
Lynas recently came under scrutiny following its agreement to supply rare earth materials to the US military.
A parliamentary committee is currently examining whether the arrangement aligns with Malaysia's foreign policy, particularly given the country's support for Palestine.
Commenting on the matter, Syed Ibrahim said he was not aware of the committee's findings and declined to speculate on whether any action would be taken against the agreement.
Malaysia is estimated to have about 16.1 million tonnes of inferred rare earth reserves, with previous government estimates valuing the resources at around RM970 billion.
According to Syed Ibrahim, much of these deposits are located within protected forest areas, and the government is conducting mapping and environmental studies to identify extraction methods that minimise impacts on biodiversity.
