I had the opportunity to speak with Ausbiz and discuss the potential impact of a ban on rare earths exports from Malaysia. Please click on the link below to access and watch the interview:
Malaysian Rare Earths Exports Threatened
The proposed ban by Malaysia of rare earths exports is yet another factor that will increase anxiety in world markets, particularly western economies, regarding strategic minerals. It’s a further example of growing resource nationalism and the desire to develop downstream processing, or value-adding, in emerging economies.
Malaysia is home to just a fraction of the world’s rare earth reserves, with an estimated 30,000 metric tons, which compares with China, currently the world’s biggest source, with an estimated 44 million tons of reserves. The decision, however, comes at a critical time, as the world looks to diversify away from China. At this stage we don’t know when the proposed ban would come into effect.
But it’s not only the west, as Malaysia’s ban could affect sales to China, which imported about 8% of its rare earth ores from Thailand between January and July this year. Myanmar accounted for 38% of rare earth imports into China in January-July, and was also the fourth biggest source of rare earth mining in 2022.
The legislation could have some negative impacts on potential investment in Malaysia from Chinese parties, which have looked to other Asian nations to source unprocessed or mixed rare earth compounds as feedstock for (rare earth) processing facilities in southern China.
Lynas Rare Earths, the biggest producer of rare earths outside China, has a plant in Malaysia to process concentrate that it gets in Australia. It is so far unclear if Malaysia’s planned export ban will impact Lynas.
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.