Malaysia will develop a policy to ban exports of rare earth raw materials to avoid exploitation and loss of resources, Prime Minister Anwar Ibrahim said on Sept. 11, making it the latest country to restrict shipments of key minerals according to Reuters.

Malaysia is home to just a fraction of the world's rare earth reserves, with an estimated 30,000 metric tons, per data from the United States Geological Survey in 2019. China is the biggest source with an estimated 44 million tons of reserves.

The decision comes as the world looks to diversify away from China, the world's largest producer of the critical rare earth minerals that are used in semiconductor chips, electric vehicles and military equipment.

Anwar said the government would support the development of the rare earths industry in Malaysia and that a ban would "guarantee maximum returns for the country."

He did not say when the proposed ban would come into effect.

The rare earth industry is expected to contribute as much as 9.5 billion ringgit ($2 billion) to the country's gross domestic product in 2025 and create nearly 7,000 job opportunities, Anwar said.

"Detailed mapping of rare earth element sources and a comprehensive business model that combines upstream, midstream and downstream industries will be developed to maintain the rare earth value chain in the country," he said.

Malaysia's ban could affect sales to China, which imported about 8 percent of its rare earth ores from the Southeast Asian country between January and July this year, according to China customs data.

Critical minerals

Earlier this year, China itself announced restrictions on exports of some metals used widely in the semiconductor industry, in a move seen as retaliatory measure for U.S. curbs on sales of technologies to China.

The curbs triggered fears that China could also limit exports of other critical minerals including rare earths.

Australia's Lynas Rare Earths Ltd is the biggest producer of rare earths outside of China and has a plant in Malaysia to process concentrate that it gets in Australia.

It was unclear if Malaysia's planned export ban will impact Lynas.
Malaysia has imposed restrictions on some of Lynas' processing operations, citing concerns about radiation levels from cracking and leaching.

Lynas has disputed the allegations and has said it complies with regulations.

($1 = 4.6700 ringgit)

Readers can read more about Lynas’ work in Malaysia here

Photo from Shutterstock.