Google Earth Map Malaysia
Rosette Allaband
The Malaysian cabinet is sending one of its ministers to China to propose investments in a rare-earth refinery. It is unclear whether Beijing will make an exception to its ban on the export of technologies for the extraction and separation of rare earths. A local plant is also designed to cut a thriving illegal trade in critical minerals.
Although China banned the export of technologies for rare-earth extraction and separation last December, Malaysia hopes to convince Chinese authorities to make an exception to set up an alternative supply chain.
Rare earths are a group of minerals crucial the production of modern technologies, from wind turbines and electric car batteries to smartphones to ballistic missiles. Despite their name, they are found in great quantities in some countries.
In the meantime, lawmaker Howard Lee Chuan How has been appointed to head a new parliamentary caucus on critical minerals. "We need to have a Petronas of critical minerals," Lee said, referring to the state-owned oil and gas company.
The government Tuesday said it allowed Lynas to continue to import and process rare earths at its refinery in central Pahang state, reversing a decision for such activities to halt by Jan. 1. This came after Lynas proposed a method to draw out thorium, the radioactive element, from raw feedstock and from over a million tons of waste accumulated at its refinery.
Science Minister Chang Lih Kang said Tuesday that officials had studied Lynas proposal and found it feasible. He provided no details. He said Lynas would need time to conduct a pilot study, before commercializing thorium, which can be sold for use in nuclear plants overseas and other industries.
KUALA LUMPUR -- Malaysia will develop export ban policies on rare earth elements to avoid "exploitation and loss of resources, guaranteeing maximum returns" to the country, Prime Minister Anwar Ibrahim said in parliament on Monday.
"Detailed mapping of rare earth elements and an overall picture of a business model combining upstream, midstream and downstream industries will be developed to ensure that the value supply chain of rare earth elements remains in the country," the prime minister said as he tabled a mid-term review of the government's five-year economic plan that runs to 2025.
Malaysia plans to ban exports of rare earth raw materials in a bid to boost domestic processing of the valuable elements, Prime Minister Anwar Ibrahim said yesterday, echoing a recent string of export restrictions in neighboring Indonesia.
In this respect, the proposed Malaysian policy bears a close similarity to policies adopted in recent years in neighboring Indonesia, designed to stimulate the development of domestic processing industries rather than allowing its raw materials to generate wealth abroad.
Global developments since then have changed the world demand and supply of critical minerals in the world. Critical minerals, defined by the Energy Act of 2020, are mainly non-fuel minerals or elements identified to have a high risk of supply chain disruption but which have an essential function in one or more energy technologies.[2] Projections from the International Energy Agency (IEA),[3] indicate that the rush for clean energy and the attendant demand for electric vehicles (EVs) and batteries needed to power the EVs have driven up the demand for critical minerals such as aluminium, nickel, tin, rare earth elements (REE) etc. Geopolitical tensions have also spurred a proliferation of new industrial policies seeking to reduce overdependence on limited sources of supply. Supply is however concentrated to a few economies, with the share of the supply in the top three economies in 2022 remaining the same or even larger, seen over the last three years (Figure 1).
Developing countries that are resource-rich in critical minerals are therefore keen to seize this high-demand opportunity to join the emerging new supply chain and to use these resources as a new source of growth. Likewise in Malaysia, interest in mining activities has revived in line with the rise in global interest. This article traces new interest in the development of mining activities, the types of minerals available, and their location in Malaysia. Current policies and challenges to develop the rare earth industry is used as a case study.
The plan reveals that Malaysia possesses mineral resources potentially worth RM 4.11 trillion (approximately US$982 billion); these include both metallic and non-metallic minerals. The estimated value of metallic minerals alone is RM1.03 trillion, with critical minerals possessing a potential estimate value of up to US$182 billion.[5] Metallic minerals such as nickel, manganese, copper, and aluminum are used in EV battery production. While Rare Earth Elements (REE) are also used for the development of electric vehicles (EVs), they are not used in lithium-ion batteries. Instead, they are necessary for the magnets that form the main propulsion motors.
REE development continues to be championed by certain segments of Malaysian society. In 2014, Akademi Sains Malaysia (ASM), together with the Ministry of Science, Technology, and Innovation (MOSTI), produced a Blueprint for the establishment of REE industries in the country as a new source of growth. A critical component of this plan was the call for development of midstream and downstream activities, rather than a mere focus on upstream extraction alone; this was to increase value-added activities in the country (Figure 4). Midstream refers to the transformation of minerals into refined products through separation and purification while downstream activities input these refined products into manufacturing.
Although the suggested blueprint was not adopted, the government came up with the NMITP in 2021. Like the blueprint, this latter plan also emphasized downstream development as the way forward for mineral resource development. The New Industrial Master Plan 2030 (NIMP 2030), launched in September 2023, also calls for downstream development by using mineral resources to manufacture advanced materials, with the types of advanced materials being left to be determined by the market players.
As noted by IEA,[20] local and regional development are affected by mineral exploitation in three significant ways. The first is the use of the land where the unmined minerals are found. Deforestation is a key concern. For example, the spurt in nickel mining in Indonesia since 2019 has led to a loss of 76,301 hectares in the country,[21] escalating the loss in biodiversity and the habitats of some endangered species.
Likewise, NR-REE in Malaysia appear to be located near or at high-carbon stock areas (see Figures 5 and 6 below). A deeper investigation of these locations also revealed the great extent to which surrounding areas have been deforested over the last 10 years (2012 to 2022). Although the causes of the deforestation are not known, this connection highlights forested areas can be encroached upon once a certain area is identified for future NR-REE mining.
To mitigate deforestation due to mining, in-situ leaching has been proposed as an alternative to open cast mining. This method mainly entails the extraction of REE via the injection of chemicals such as ammonium sulfate into hills containing REE deposits. The minerals are then dissolved into a liquid form before being extracted at the surface. This method is known to avoid destruction of vegetation and removal of topsoil, essentially resolving the risk of deforestation. There are other potential pitfalls, however, even if less land clearing and tree felling problems are encountered with in-situ leaching as compared to open cast mining. There is, for example, a possibility of leakage from the leaching ponds which contain pollutants, to underground water or other waterways.[25]
Waste generation from mineral development and processing is another concern. The Lynas tussle over radioactive toxic waste has been momentarily resolved by a proposal to convert radioactive waste to non-radioactive waste. Although the technology is available in Malaysia, it is still at the laboratory level, and is not yet ready for commercial application.[29]
Mineral rents can be a good source of income for fostering development. Perak, for example, was reported to have received RM1.66 million in royalty payment for the production of Rare Earth Carbonate (REC) from its rare earth pilot project; the product was then exported to China. The prospects of making a quick buck from selling REE has led to reports of illegal REE mining in Negeri Sembilan and Malacca.[30]
Although the NIMTP has included governance as one of the important pillars for the development of the mineral industry, there is no discussion on accountability for the revenue received and for these revenues being invested to benefit public welfare for the immediate and the distant future. Accountability requires proper disclosure of revenues paid by the companies involved in mineral development, and much greater transparency in communications with the public.
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