By Associate Professor Dr Aznan Fazli Ismail, Centre of Excellence for Critical Mineral Technology, Faculty of Science & Technology, Universiti Kebangsaan Malaysia
Malaysia’s rare earth industry is attracting foreign interest, opening opportunities for investment, technology and market access. The question is how these partnerships will build lasting Malaysian capability. A national rare earth corporation, jointly owned by the Federal Government and participating states, deserves consideration as a vehicle to coordinate that effort.
The New Straits Times report on October 12 quoted Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani on strategic cooperation and technology transfer. His emphasis on strengthening domestic processing and manufacturing deserves support.
Developments since then make this discussion more pressing. On October 14, American Resources Corporation announced plans to develop Malaysian separation and refining operations through American Resources Indo Pacific, using ReElement Technologies’ proprietary technology. Separately, the US Embassy reported that more than a dozen American companies were exploring Malaysian mining and processing opportunities.
These announcements show interest, although they do not establish that projects have secured financing, obtained approvals or demonstrated commercial operation. Malaysia has an opportunity to determine how investments should support national priorities before individual agreements set the direction.
Those priorities should reflect the purpose of the moratorium on raw rare earth exports introduced in January 2024: developing domestic processing and retaining greater value locally. Its effectiveness should be assessed through processes reaching pilot operation, products meeting buyers’ specifications and technical barriers being resolved. Such an assessment would clarify where foreign expertise and public funding are needed.
It should also examine how separate projects contribute to a coherent industry. Producers negotiating independently may miss opportunities to share infrastructure, build processing scale and strengthen their position with buyers. Early coordination matters because long-term supply and technology agreements can become difficult and costly to change.
The proposed national corporation could coordinate processing investment, technology development and market access. Participating states should have a commercial stake, a voice in major decisions and an agreed share of returns, with their authority over land and mining permissions respected.
Petronas offers a lesson in sustained investment in expertise and commercial capability. A rare earth corporation would nevertheless require its own structure, agreed with the states, professional management and accountability. Its commercial responsibilities should remain separate from regulatory oversight.
The corporation could combine suitable supplies, support product assessment and negotiate longer-term sales contracts. This could improve Malaysia’s bargaining position, without implying control over global prices. Shared separation and refining facilities could serve several sources, while initial extraction takes place near deposits where appropriate. Their location and scale must be commercially justified.
Beyond coordinating supply and facilities, the corporation should help Malaysia build expertise across the different processing stages. Producing mixed rare earth carbonate from ion-adsorption clay is a significant step. Separating it into individual oxides of consistent purity requires further expertise. Partnerships should address these specific gaps and involve Malaysian scientists, engineers and technical professionals in testing, design and troubleshooting, supported by training, technical information and negotiated rights. This would enable local teams to maintain recovery and product quality when feed composition changes and gradually assume greater responsibility.
Experience from projects such as Kenering should guide locally led pilot work. Smaller operations can generate dependable data and develop personnel before expansion, with performance assessed against recovery, purity, stability, cost and waste management. Where thorium or uranium is present, its distribution and residue management must be established under applicable requirements.
The proposed national corporation could commission research on operating problems and require independent testing before major investments. This would connect research more directly to industrial decisions.
The reported RM747.2 billion resource valuation indicates Malaysia’s potential. Realising it requires technical competence and sound commercial decisions. Foreign partnerships should leave Malaysia with people who can improve technologies, companies supplying competitive products and institutions better equipped to negotiate future investments. These are the lasting returns our rare earth strategy should deliver.