Lynas Rare Earths Ltd.

Malaysia is considering relaxing its ban on the export of unprocessed rare earth minerals to strengthen its role in the global supply chain amid intensifying resource competition. Deputy Minister of Natural Resources and Environmental Sustainability Syed Ibrahim Syed Noh revealed that the government is studying the feasibility of easing the restrictions after facing pressure from local governments and foreign investors, with Malaysia attracting interest from the United States, Australia, France, and India. Malaysia announced a halt to raw rare earth exports in 2024 to spur domestic processing investment, but after China imposed export controls in response to the trade war with the US, many countries are accelerating the search for alternative mineral sources. If raw mineral exports are allowed again, the government will impose strict conditions, such as requiring investors to bring in capital and transfer technology, and exports must be for research and development purposes abroad. Malaysia aims to develop the country into a regional strategic mineral hub by 2030, seeking to attract investment across the entire supply chain, from mining and processing to downstream industries. Although Malaysia holds only about 1% of the world's rare earth reserves, compared to China's dominant share of over 50%, the country continues to draw interest from foreign operators, such as Australia's Lynas Rare Earths, which has a separation plant in Malaysia, and France's Carester SAS, which is preparing to build a separation plant in Perak state through a joint venture with Malaco Mining Group. The Malaysian government estimates that the country has approximately 16.1 million tonnes of rare earth resources, potentially worth up to 970 billion ringgit, or about 237 billion US dollars. However, many deposits are located in protected forest areas, prompting the government to explore and develop mining approaches that do not harm biodiversity.

Pentagon suppliers warn that the United States will not have sufficient domestic processing and magnet manufacturing capacity by the January 1, 2027 deadline, potentially forcing the Trump administration to extend access to Chinese rare earth materials. Industry executives told Reuters that despite billions of dollars in federal support for new mines, separation facilities, and downstream manufacturing, U.S. capacity remains insufficient to meet military and commercial demand. The shortage centers on neodymium-iron-boron and samarium-cobalt magnets, which rely on rare earth supply chains still dominated by China. Companies including MP Materials, USA Rare Earth, Lynas Rare Earths, Energy Fuels, and REalloys are investing heavily, with several projects expected to begin commercial production within 18 months, but executives say they cannot fully replace Chinese supply by early 2027. Beijing's tighter export controls and expanded traceability regime have further strengthened its grip on global magnet feedstocks.