Malaysian PM wants to stop exporting rare earth materials for electric-car parts

The Prime Minister of Malaysia has said the country may stop exporting valuable rare earth raw materials, potentially reducing the supply of electric-car batteries and motors from China.

As reported by news agency Reuters, Malaysian PM Anwar Ibrahim wants to restrict overseas shipments of the rare earth materials, as he believes the current exportation of the key minerals creates exploitation of labour and a loss of resources.

While Reuters reports Malaysia has an estimated 30,000 metric tonnes of rare earth reserves – compared to the 44 million tonnes in China, the world’s largest contributor – approximately eight per cent of the rare earth ores imported to China between January and July 2023 came from Malaysia.

In China, these rare earth raw materials are used to build electric-car batteries and motors, as well as semiconductor chips which are critical to the automotive industry – among other products.

According to Mr Ibrahim, Malaysia’s rare earth industry is predicted to contribute up to 9.5 billion ringgit ($AU3.17 billion) to its GDP in 2025, as well as creating almost 7000 jobs.

Speaking to Reuters, industry analyst David Merriman told the publication Malaysia’s proposed ban could affect the day-to-day operations of Chinese companies with facilities in the country.

“The legislation could have some negative impacts on potential investment in Malaysia from Chinese parties, which have looked to other Asian nations to source unprocessed or mixed rare earth compounds as feedstock for (rare earth) processing facilities in southern China,” Mr Merriman said.

Reuters also reports Australian firm Lynas Rare Earths – the world’s largest rare earth producer, outside China – has a raw material processing facility in Kuantan, Malaysia, though it is not yet clear how the proposed ban will affect its operations.

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