Malaysia To Ban All Rare Earth Exports - RM9.5 Billion More To GDP & 7,000 Jobs!

Malaysia is planning to enforce a regulation prohibiting the export of rare earth raw minerals, as announced by Prime Minister Anwar Ibrahim last Monday. While Malaysia has a relatively modest fraction of the world's rare earth stocks, estimated at 30,000 metric tonnes by the US Geological Survey in 2019, this move is consistent with a global trend of countries limiting shipments of these essential minerals.

China has been the major producer of these important minerals, which are widely utilised in semiconductor chips, electric vehicles, and military equipment, with an estimated 44 million tonnes of reserves. Malaysia intends to boost its indigenous rare earth business and assure maximum profits for the government as nations attempt to lessen reliance on China.

The proposed export ban's exact implementation date is yet to be determined. Prime Minister Anwar however highlighted the government's commitment to promoting the expansion of Malaysia's rare earth sector which may add up to RM9.5 billion to the country's GDP by 2025 and create roughly 7,000 new jobs.

Anwar also indicated intentions to precisely map the rare earth sources and the development of a comprehensive business model including upstream, middle, and downstream industries in order to preserve the country's rare earth value chain.

It's worth mentioning that Malaysia's export prohibition could have an impact on China, which relied on Malaysia for about 8% of its rare earth ore imports between January and July of this year, according to Chinese customs data. However, on a flipside this effect could result in an increase in Chinese investment into Malaysia, particularly in the automotive sector, as seen by the Geely Group's recent decision to invest RM45 billion in redeveloping Tanjung Malik, Malaysia's automotive heartland. 

Source: REUTERS