Hard to know where Lynas' rare earth products end up, says minister

It is “technically difficult” to determine where Lynas’ rare earth exports from Malaysia would end up or what it would be used for, said Investment, Trade, and Industry Minister Johari Abdul Ghani in a parliamentary reply.

He said this in response to a question from Kuala Terengganu MP Ahmad Amzad Mohamed, who asked about the company’s agreement to supply the US defence industry and its strategic implications, including in terms of export destinations, end-use of the rare earth minerals, national security, and Malaysia’s policy on minerals...

It is “technically difficult” to determine where Lynas’ rare earth exports from Malaysia would end up or what it would be used for, said Investment, Trade, and Industry Minister Johari Abdul Ghani in a parliamentary reply.

He said this in response to a question from Kuala Terengganu MP Ahmad Amzad Mohamed, who asked about the company’s agreement to supply the US defence industry and its strategic implications, including in terms of export destinations, end-use of the rare earth minerals, national security, and Malaysia’s policy on minerals.

Johari (above) responded in a reply dated yesterday by stating that Lynas has informed that the supply is for research and development purposes within the permanent magnet manufacturing industry.

At the same time, it is difficult to ascertain the final destination and end-use of rare earth elements (REE) because it has diverse applications across various industries.

“Furthermore, the supply chain is fragmented in nature, where products frequently change hands between manufacturers and suppliers, alongside differences between buyers and product end-users,” he told Parliament.

Lynas operates a rare earth refinery in Gebeng, Pahang.

It is the world’s largest rare earth refinery outside of China, and the only significant producer of heavy REE outside of China.

This also means it is the only source of separated rare earth compounds outside of China’s export control regime.

These are critical minerals for a variety of high-tech applications, such as neodymium for making powerful magnets needed for electric motors, dysprosium for control rods in nuclear reactors, and cerium for as a catalyst in petroleum refining.

Lynas’ deal with the US

In March, Lynas signed a binding letter of intent with the US Department of Defense to finalise an agreement to supply the US defence industry with both light and heavy rare earth oxides for four years.

It also announced that the US$96 billion (RM392 billion) arrangement will entail a US$110 (RM449) per kg floor price for neodymium-praseodymium oxides, even though the benchmark price typically hovered around US$60 (RM244) to US$80 (RM326) per kg last year.

The announcement prompted a coalition of NGOs to warn Putrajaya that the agreement would link Malaysia’s rare earth processing industry to foreign military supply chains.

They said in an open letter to Prime Minister Anwar Ibrahim that this could compromise Malaysia’s principled positions on conflicts, including Palestine, Iran, and beyond.