Federal, state govts must find ways to develop rare earth industry: Chin Tong

 

The federal and state governments must find new ways to work together to develop a coherent rare earth elements (REE) industry, said Deputy Investment, Trade and Industry Minister Liew Chin Tong today.

He said better federal-state coordination is needed under the 1957/1963 Constitutional Framework, which assigns natural resources to the states.

Liew said states should be encouraged to support industrialisation rather than focus solely on extraction, and that government-linked investment companies and government-linked companies must be ready to invest. 

“It is important to note that China emerged as the largest refiner of REEs while US companies folded in the last several decades because REEs on their own are not exactly a very lucrative business.

“Therefore, building a comprehensive supply chain is the key,” he said in his keynote address at the launch of a policy brief, “From Mine to Magnet”, by the Institute of Strategic and International Studies (Isis) Malaysia today.

Also present were Australian High Commissioner in Malaysia Danielle Heinecke and Isis Malaysia chairperson Prof Faiz Abdullah.

Liew added that Malaysia is determined to develop the industry from upstream to downstream, and the government needs to take the lead through industrial policy and international cooperation.

He noted that several initiatives are needed if the government were to intervene effectively. This includes building the institutional capacity and capability to harness the sector, and regulatory capacity to ensure it is developed sustainably and fulfils all safety requirements.

“Malaysia is the world’s second largest exporter of refined rare earths, but we should also acknowledge that leaving REEs to market forces alone without institutional coordination is not going to work,” he said.

While the government has made the right decision to ban raw REEs exports, Malaysia needs to be very clear and determined that it does not sell raw cakes, but wants to develop the industry from upstream to downstream.

Liew said the government would make available the right set of incentives and capital for the industrialisation of the sector.

“Always keep in mind the geopolitical and geoeconomic challenges of this sector and build international cooperation strategically. However, we have to remember that doing more of the same won’t yield different results.

“A robust Malaysian REE industry will have global consequences, and it may even make Malaysia a more important middle power, but we need to be more organised,” he added.

- Bernama