Malaysia seeks to import rare earth processing technology from China to develop its trillion-dollar mineral deposits

(Observer) According to Singapore's "The Straits Times" (The Straits Times) reported on the 18th of local time, Malaysia is applying to China to import rare earth processing technology, with a view to developing the country's mineral deposits worth nearly 1 trillion ringgit (about 1.5235 trillion yuan, 1 ringgit is about 1.5 yuan). The report mentions that although the Chinese government has included rare earth extraction and separation technology in the list of "rare earth extraction, processing and utilization technology" that is prohibited for export since December last year, the article suggests that the Malaysian side's move is motivated by "far-reaching geo-strategic considerations".

The Straits Times said that Malaysia contains all 17 rare earth elements under the ground, and China is the only producer with all the rare earth production capacity, so the value of cooperation between Malaysia and China will be much greater than cooperation with other countries. However, the report also mentioned that although the Chinese side is likely to have the most effective program to build factories in Malaysia, but whether it will "make an exception" for Malaysia remains to be seen.

On April 18, The Straits Times said it had learned that the Malaysian Cabinet had tasked Science, Technology and Innovation Minister Tay Li Kang to visit China at the end of April to seek a company to invest in a rare earth refinery in Malaysia. Mr. Cheng said Malaysia would "explore opportunities to play a greater role in the rare earth supply chain."

In June last year, Nie Nazmi, then Malaysia's Minister of Natural Resources, Environment and Climate Change, said the country had more than 16 million tons of non-radioactive rare-earth elements, which the government valued at about 800 billion ringgit ($1.219 trillion), the report mentioned. Some experts believe that the value of these minerals will soon surpass 1 trillion ringgit as demand increases.

In order to obtain more economic value from these minerals, the Malaysian government suspended the export of unprocessed rare earths from January 1 this year. Malaysian Prime Minister Anwar said in this regard, the ban is aimed at "ensuring that the country gets the maximum return", and plans to build downstream capacity in the rare earth industry to achieve the goal of increasing gross domestic product by 9.5 billion ringgit by 2025 (an increase of 0.5%), and create 7,000 jobs.

It is worth mentioning that in September last year, Anwar announced "rare earth export ban", Reuters and other Western media took the opportunity to speculate that Malaysia's statement is at a time when other countries are trying to make their own key supply chain "away from China". However, the Malaysian Institute of Geology Director Abdul Rashid Jaafar quickly and publicly refuted the so-called "China threat theory".

"Currently, China is the world's leading producer of rare earths. They are number one in the world in terms of knowledge and technology, from exploration, mining, processing to production." Ghaffar said, "They can also be a good partner for Malaysia if a win-win deal can be struck."

Apart from banning exports, the Anwar government at the time also promised to develop a blueprint for the country's rare earth industry by devising plans for onshore processing and other related services. Earlier reports had mentioned that Malaysia plans to develop a detailed mapping of the country's rare earth element resources and comprehensively plan an integrated industrial production model from mining, processing and export. According to the Straits Times, the plan is not yet in place, but the value of this framework will go far beyond simply exporting raw minerals.

In particular, the report emphasized that although many countries have rare earth processing technology, China is the only producer with mature production capacity for all 17 types of rare earths, and has also begun to refine Malaysia's mineral deposits. Malaysia has all 17 rare earth elements in its subsoil, so working with any other country than China would not allow all of them to be refined, and the output would be of lower value.

The article cites the example of Australian rare earth giant Lynas' operations in Malaysia. The company has built a more than A$1 billion rare earth refinery in Kuantan, Malaysia, one of the world's largest rare earth processing plants, which has been criticized by local residents for years for pollution. The plant still needs to build a different capacity in processing Malaysian ore, which is estimated to take two years to complete, the report said.

The Straits Times believes that given China's experience in processing ore, it is likely that China has the most effective solution for building a plant in Malaysia, but it remains to be seen whether the Chinese government will make an "exception" for Malaysia.

December 21 last year, China's Ministry of Commerce, the Ministry of Science and Technology issued on the publication of "China's export restrictions on the export of technology directory" announcement. In the part of the export ban, "rare earth refining, processing, utilization technology" included, specifically involving rare earth extraction and separation process technology; rare earth metals and alloy materials production technology; samarium cobalt, neodymium iron boron, cerium magnet preparation technology and rare earth calcium borate oxygen preparation technology.

Catalog adjustment immediately triggered a lot of attention. 22 December, my foreign ministry spokesman Wang Wenbin in the regular press conference on this response, said that the ban on export restrictions on the export of technology directory revision is China's adaptation to changes in the situation of technological development, improve the management of trade in technology and routine adjustments, China has always adhered to the opening up of the reform and development, will be in the maintenance of the country's economic security and development interests on the basis of the It will create positive conditions for promoting international economic and trade cooperation.