From a local socioeconomic perspective, the REE industry is being positioned as a generational economic engine for the SG4 states—historically the lesser-developed regions of Peninsular Malaysia.
Having REE reserves is an asset but human capital is the true currency.
SG4 needs to create and build a dedicated ecosystem of:
- Metallurgical and chemical engineers,
- Advanced environmental scientists, and
- Specialized supply chain lawyers who understand rare earth pricing mechanisms...
The resource remains trapped if the human capital is not harnessed.
This is why Western nations are currently focusing less on digging new holes, and more on funding joint ventures, building domestic research hubs, and fast-tracking the training of a new generation of chemical engineers.
And in REE mining, it takes an average of 10 to 15 years to bring a discovered REE deposit into commercial production.
Even if tomorrow another state discover a massive, easily accessible reserve, that supply won't hit the market until the late 2030s.
The craze for REE, driven largely by technological advancements presently, in the local conntext is akin to the Musang King effect couple of years ago.
Musang King durians apparently are only grown in Malaysia.
The market and demand for Musang King durians exploded when the chinese in China took a liking and willing to pay top dollars for it.
When Musang King prices skyrocketed, thousands of landowners across Malaysia and parts of Southeast Asia cleared land to plant durian trees.
When those trees matured simultaneously, the market flooded.
Lo and behold, when everyone decided to switch and plant the same, naturally a massive surge in supply occurred.
Noted that agricultural booms and mineral booms are different.
And global automakers and tech giants cannot easily substitute REEs.
But if there is a risk that eases REE prices, it won't come from an abundance of mines, but from engineering workarounds.
Because REE supply chains are so volatile, companies like Tesla and BMW are actively investing heavily in research to build EV motors that use zero rare earths (using induction or synchronous motors instead).
As recycling technology improves, extracting REEs from old electronics and discarded EV motors will add a secondary supply layer, which will naturally help smooth out extreme price spikes in the long run.
Since the Federal government and the leadership in the SG4 states shared similar views i.e instead of exporting raw minerals to building a high-value downstream ecosystem, this means that wealth generation hinges directly on having a skilled local workforce.
To feed this nascent industry, SG4 should provide scholarships and funding for students born in their respective states to pursue their academic qualifications in universities and vocational institutions here or abroad that aligned with REE to create an immediate and sustainable talent pipeline.
Even though the states are structuring agreements that mandate technology transfer and local talent training as prerequisites for mining and processing licenses, it still doesn’t fully address and ensure a sustainable pipeline of locals to support the entire industry in their states.
The human capital push isn't just about extraction.
It heavily includes training environmental engineers, sustainability auditors, and regulatory experts who can manage the environmental impact, making the SG4 REE industry globally competitive and compliant.
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