Malaysia has significant potential to become a key player in the downstream rare earth elements (REE) industry, particularly in producing super magnets for the growing electric vehicle (EV) sector, according to Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad. During a policy-level debate on the Supply Bill 2025 (Budget 2025) in the Dewan Rakyat today, he emphasized that Malaysia could be a major contributor to the global EV manufacturing supply chain, thanks to its rare earth resources.
Nik Nazmi explained that the latest REE roadmap, which covers the entire supply chain from upstream to downstream, had recently been presented at the sixth National Economic Action Council meeting of 2024, chaired by Prime Minister Datuk Seri Anwar Ibrahim. The roadmap is part of a broader initiative to develop a sustainable REE industry in Malaysia, with a focus on creating a competitive and resilient ecosystem.
The roadmap was developed following a comprehensive study conducted by the Academy of Sciences Malaysia, which evaluated a proposed business model for the REE industry, considering the full ecosystem of production and processing. According to Nik Nazmi, Malaysia’s involvement in the downstream segment of the REE industry is particularly promising, as it could support the expansion of the EV manufacturing sector, which relies heavily on rare earth magnets for battery and motor components.
However, Nik Nazmi noted that for Malaysia to maximize its potential in the REE industry, there needs to be a local intermediate industry capable of processing rare earth raw materials, such as rare earth carbonates, which are produced by local mines. This would add value to the country’s abundant REE resources and foster further growth in the sector.
The minister also highlighted the role of Lynas Malaysia Sdn Bhd, one of the country’s leading rare earth mining companies, in helping process REE domestically. Lynas, which currently operates in Australia, has committed to setting up a new processing line in Malaysia to handle the country’s REE. This new line would allow Malaysia to process more of its own rare earth materials, reducing reliance on foreign facilities and contributing to local economic development.
However, the minister emphasized that Lynas must adhere to strict environmental, health, and safety standards when expanding its operations in Malaysia. The company has applied for a long-term operating license, which is being carefully evaluated. Nik Nazmi explained that while the application for a new processing line involves significant investment, it is crucial for the company’s continued operations in Malaysia. Without approval for the new line, Lynas could face challenges in sustaining its operations in the country.
In conclusion, Malaysia has the opportunity to become a significant player in the global REE industry, particularly in supporting the fast-growing electric vehicle sector. By strengthening its local processing capabilities and ensuring a sustainable and responsible approach to mining and production, the country can unlock substantial economic opportunities while contributing to the global transition to clean energy.
