‘High growth, high value’: Malaysia’s rare earth industry is getting a boost, but public opinion is also divided

Gerik, Perak: Mr Aye Chuan Din Chum knows that his village, Kampung Pong in the north-western state of Perak, is located in an area that has many natural resources and he believes that there will always be Keeping an eye on.

The former chief of the small quaint Siamese village located in a valley about 20 kilometers from the Malaysia-Thai border claimed the area contained resources such as barite, tin ore, precious metals and even gold.

“Many people have come here in the last few years. There is so much here, even under this earth,” a 70-year-old man told CNA in his village recently.

Kampung Pong – accessible by a winding and hilly tarred road, which in most parts allows only one vehicle to pass – is the site of a pilot “non-radioactive rare earth element” (NR-REE) mining project in Malaysia. The nearest settlement is to start operations in March 2022.

About 200 people live in the village, most of whom work as general laborers or in informal jobs.

While Mr Ai Chuan and other villagers are not directly involved in the NR-REE mining project, located about seven kilometers from the village via a dirt road, he told CNA that he had been asked to monitor the area several times before. Was hired. A few years for foreign businessmen.

He said he was not sure what the rare earth elements actually were, but believed the interested parties wanted to extract some “chemicals” from the ground.

“They were doing some kind of testing with these chemicals. I was told that they wanted to make batteries for handphones or electronics from these chemicals,” he said.

jump on the bandwagon

Rare earth elements are used in everyday consumer electronic devices such as laptops, cameras, televisions, and smartphones.

These are also considered important for the development of so-called green infrastructure such as renewable energy sources as well as electric vehicles (EVs).

China controls the market in rare earth elements, producing about 70 percent of the world’s supply while processing about 90 percent.

And as the use of rare earth elements gains greater importance, Malaysia is looking forward to start mining these elements and establish a full-fledged industry in the country under one of its high-growth, high-value (HGHV) sectors. Is increasing. Initiative.

Prime Minister Anwar Ibrahim told parliament on 11 September that the government was planning to ban the export of rare earth raw materials to avoid exploitation and loss of resources as well as guarantee maximum returns for the country.

He said a new national minerals policy would be drafted to promote comprehensive development of the minerals industry based on “principles of sustainability and responsibility”.

The policy will be used as a guide in carrying out mining activities in permanent forest reserves, environmentally sensitive areas (ESAs) and protected areas, Mr Anwar said.

He then said, “Detailed mapping of rare earth element resources and a comprehensive business model integrating upstream, midstream and downstream industries will be developed to maintain the rare earth value chain in the country.”

In this context, upstream refers to mining activities, while midstream is the process that recovers rare earth elements.

Downstream meanwhile refers to the industry that uses rare earth elements to manufacture products such as super magnets.

Mr Anwar said the rare earth industry is expected to contribute RM9.5 billion (US$2.03 billion) to Malaysia’s GDP in 2025, with the industry expected to create 7,000 new jobs.

Malaysia’s Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad told CNA that the country currently has an estimated 16.2 million tonnes of NR-REE deposits, with a potential estimated value of up to US$182 billion.

“The importance of pursuing the rare earth minerals (industry) is because of the impact it can have on the national economy,” he said in a written response to questions from CNA.

He said a set of standard operating procedures (SOPs) for NR-REE mining has been presented and agreed in principle by the Cabinet, but it will not be made public until there is a consensus on the rare earth industry. A comprehensive policy is not developed and finalized.