Two pro-Palestine advocates have called for Malaysia to impose restrictions on the export of rare earth materials processed by Lynas Rare Earths.
This came after the company signed a binding letter of intent with the US Department of Defense to finalise a four-year agreement to supply the US defence sector with rare earth minerals.
Boycott Divestment & Sanctions Malaysia (BDS) chairperson Nazari Ismail argued that the business deal is also a challenge to Malaysia's spirit of non-aligned foreign policy.
"Yes, the Malaysian government should impose some form of restriction on the export of Lynas' output. It should not supply countries that use them for illegal military operations.
"Clearly, the US is now engaged in military operations after it carried out an unprovoked attack on Iran," the academic told Malaysiakini.
Nazari concurred that while this could lead to diplomatic repercussions, he said it was "normal when you stand up for justice and hold on to moral principles”.
He added that Putrajaya should be concerned about the Lynas deal, given the US' role in the deadly bomb strike on two schools in Iran, which resulted in the deaths of over 100 schoolchildren.
Nazari said that since Lynas holds an operating licence issued by Putrajaya, the terms of that licence should be revisited to include restrictions on the end buyers of the processed materials.
"As stated earlier, the output should not be sold to buyers who plan to use it for illegal military campaigns," he emphasised.
Weaponry production
Former PKR vice-president and fellow pro-Palestine activist Tian Chua echoed Nazari's sentiments.
"It is quite clear that the supply of rare earth elements to the US Department of Defense for security purposes would include weaponry production.
“This agreement could potentially drag Malaysia into the US supply and production chain of war machinery.
"Malaysia could impose some additional export conditions to prevent rare earth products from being shipped to US defence industries," Chua said when contacted.
He acknowledged that while the law may not provide a clear legal mechanism to prevent Lynas - a private, foreign-listed company - from entering into a commercial agreement with the US defence establishment, Malaysia is not absolved of responsibility.
"Malaysia has a lot of leverage as the US is a country committing war crimes. Our refusal to allow Lynas to support the military complex will earn us international and domestic credit.
"Our neutrality means we are open in the rare earth market, and we will continue to prevent China's monopoly on rare earth. However, the bottom line is that our industrial production and resources should not be supplying to a mass murder industry," Chua stressed.
‘Public deserves answers’
In a statement yesterday, Selangor PAS Youth chief Sukri Omar urged Lynas and Putrajaya to provide "clear, responsible explanations" to the public about the agreement.
He said the agreement raises legitimate concerns because rare earths are strategic materials used in modern military technology, including radar systems, missile systems, satellites, defence electronics, and various components of high-technology arms industries.
"The public has the right to know whether the rare earth processed through Lynas' operations in Malaysia will form part of the supply chain for the US defence sector.
"Lynas must also clarify the source of the raw materials involved in the contract, the locations where processing takes place, and whether its processing facility in Malaysia is directly or indirectly involved in supplying the American military industry.
"As a foreign company operating in Malaysia and benefiting from this country's resources and ecosystem, Lynas bears both a moral and corporate responsibility to ensure that its operations do not give rise to sensitive geopolitical implications for its host nation," Sukri added.
He said an explanation from the government was equally necessary, stressing that the rare earth issue was not a routine trade concern but one deeply tied to strategic security, global geopolitics, and the country’s standing on the international stage.
"The government must clarify whether any policy or control mechanism exists to ensure that strategic resources processed in Malaysia are not channelled to the military industries of any major power involved in international conflict," Sukri said.
Malaysiakini has contacted Lynas for comments.
What the deal is about
On March 16, Lynas said the letter of intent establishes a framework to finalise an agreement for the supply of light and heavy rare earth oxides to support US national security and supply chain resilience objectives.
Under this arrangement, the US Department of Defense will set aside about US$96 million (RM377.62 million) to purchase rare earth oxides from Lynas.
Lynas said the agreement followed a mutual decision with the Pentagon to modify an earlier agreement, due to “significant uncertainty” on whether plans to build a heavy rare earth processing facility in Seadrif, Texas, would proceed.
The statement also stated that neodymium-praseodymium (NdPr) oxides will have a floor price of US$110 per kg under the arrangement.
For comparison, its benchmark price generally hovered between US$60 and US$80 per kg last year, though it briefly reached as high as US$128 per kg this year.
The mineral is a crucial raw ingredient for making powerful magnets needed for electric motors, actuators, and other applications.
Bloomberg Intelligence reported on March 2 that China dominates 90 percent of the world’s NdPr supply, but upcoming supplies from Australia and the US are likely to slash China’s market share to 69 percent by 2030.
Lynas mines rare earth minerals from Mt Weld, West Australia, processes them, and then ships them for refining and separation into rare earth oxides at the Lynas Advanced Materials Plant in Gebeng, Pahang.
The facility in Gebeng is not only capable of producing light rare earth elements but is also the only significant producer of heavy rare earth elements outside China, and therefore the only producer not subject to China’s export controls on critical minerals.
However, the facility has faced significant opposition from environmental activists, particularly on issues surrounding the disposal of radioactive residue from its water leach purification (WLP) process.
Putrajaya granted the facility a 10-year extension of its licence beginning March 3, but on the condition that it reduces the radioactivity of the WLP residue below regulatory limits by extracting the radioactive element thorium from the waste.
Lynas will also be required to complete the thorium extraction process in Australia before shipping it for further processing in Malaysia. - Mkini
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