Malaysia eases moratorium on raw REE exports to attract investment

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Malaysia's REE export moratorium

Highlights

Malaysia eases the moratorium on raw REE exports through conditional export guidelines to attract investment while securing domestic supply.
REE investor companies must demonstrate a commitment to developing processing facilities in Malaysia within three years of export approval.
MITI is focused on investment to strengthen value-added segments of the REE industry, particularly high-tech manufacturing such as permanent magnets and batteries.

This article was translated from the original. Read the original version by our correspondent here.

Conditional export requirements for REE investors

As reported by The Edge Malaysia, the Ministry of Investment, Trade and Industry said the export exemption was implemented through the Guidelines for Conditional Exports of Raw Rare Earth Element Materials. The ministry said prospective REE investors were currently reluctant to invest due to the lack of guarantees for a stable domestic supply of raw REE materials.

MITI explained that this export flexibility is strictly limited to research and development activities. According to the ministry, the companies concerned must also demonstrate a clear commitment to partnering in the development of processing facilities in Malaysia within three years of the approval date for raw REE material exports.

The clarification was provided in MITI's response to a question from Shaharizukirnain Abd Kadir regarding the government's firm position on the U.S.$96 million, or RM389 million, rare earth oxide supply agreement between Lynas and the Pentagon in the U.S.

Focus on the value chain and high-tech manufacturing

According to MITI, the ministry's strategy focuses on attracting domestic and international investment to develop and strengthen the midstream and downstream segments of the REE industry. This focus is particularly directed at high-tech manufacturing fields such as permanent magnets, advanced materials, electronic components and batteries.

The ministry said Malaysia needs to leverage strategic partnerships and technology transfer, both domestically and from partner countries with expertise in REE processing, to realise its ambition of developing a national REE industry. According to MITI, these efforts will not only strengthen local capabilities across the entire value chain, from mining to finished-product manufacturing, but also position Malaysia as a key player in the global critical minerals supply chain.

In our earlier coverage of U.S. companies' interest in Malaysia's rare earth sector we reported that more than a dozen firms were assessing opportunities, including mining projects with local partners and investments in processing facilities. This development is linked to efforts to diversify critical mineral supplies beyond China, in line with Malaysia's goal of attracting capital and technology transfer to build a domestic rare earth value chain.

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