Moratorium On Raw REE Export Aimed At Supporting Midstream Industry Development - NRES

KUALA LUMPUR, Nov 13 (Bernama) -- The government has decided to impose a moratorium on the export of raw rare-earth elements (REE) for a short-term phase from 2025 to 2027 to support the development of the midstream industry.

The Ministry of Natural Resources and Environmental Sustainability (NRES) said that at the same time, discussions are being actively conducted with various local and international parties to ensure local processing plants for REE purification and separation, REE metal or alloy production plants, as well as super magnet manufacturing facilities are set up in Malaysia.

“Government-linked companies are encouraged to participate in this effort to ensure the transfer of technology and the development of local expertise,” the ministry said in a written reply published on the Parliament website today.

The statement was in response to Hassan Saad (PN-Baling) who inquired about the ministry’s strategy to develop the full REE industry value chain -- from upstream to downstream -- to maximise returns for the nation.

NRES said the government also encourages local research and development (R&D) efforts to realise the aim of establishing a domestic REE processing industry.

“Several local companies are currently undertaking such efforts in collaboration with both local and international experts.

“However, it still depends on feasibility assessments and factors such as raw material supply, financial capacity, and market demand,” it added.

NRES said the government plans to develop the full REE industry value chain, encompassing mining, processing, and value-added product manufacturing activities, as well as the recycling of REE materials.

To achieve this goal, the government has drafted a phased REE industry development strategy covering the short-term phase (2025-2027), medium-term phase (2027-2030) and long-term phase (post-2030).

For the medium-term phase, the ministry said the ban on raw REE exports will continue, taking into account that local processing plants are expected to have been established to process domestic REE resources.

“At this stage, the midstream REE industry can source inputs from abroad, and production can be exported once local demand has been met.

“During this phase, discussions will also be held to attract investors to develop electric motor manufacturing and REE recycling/reuse industries, ensuring Malaysia’s REE sector has a full value chain,” NRES said.

The ministry said that in the long term, Malaysia seeks to have a full industry chain ranging from mining to recycling/reuse industries, and to become a regional and global REE industry hub.

“To ensure smooth implementation of this strategy, the government has established a Special Task Force on the Direction of the REE Industry Development chaired by the Minister of Natural Resources and Environmental Sustainability, whose members include the Economy Minister; Investment, Trade and Industry Minister; Finance Minister II; and Science, Technology and Innovation Minister.

“The formation of this special task force is a strategic move to ensure that actions and initiatives in developing this industry are carried out more synergistically,” it said.

Meanwhile, in response to Datuk Azman Nasrudin’s (PN-Padang Serai) question on why the progress to establish the REE mining standard operating procedure (SOP) seems slower compared to those for other mining industries, NRES said the SOP has been prepared guided by Perak’s SOP and was approved by the National Mineral Council on May 8, 2023.

The ministry said the implementation of the REE SOP appears to be slow as the states have to adapt the document based on their respective mineral development legislations.

“To date, only Perak has implemented REE mining projects after obtaining the necessary approvals at the federal and state levels based on the developed SOP,” it noted.

“Although there is pressure to accelerate the development of this industry, the government has an obligation to ensure that the REE industry -- particularly at the mining stage -- is developed carefully to avoid undesirable incidents, especially environmental pollution that is difficult to resolve and would require significant expenditure,” it said.

-- BERNAMA