German Media: Why the U.S.-Australia Rare Earth Agreement Has Sparked Protests in Malaysia

The U.S. Department of Defense has reached a strategic agreement with Australia’s Lynas Corporation, with the rare earth refining plant in Gebeng, Malaysia, playing a pivotal role. However, Malaysian activists are now using this facility as leverage to voice support for Palestinians in Gaza.

The United States seeks rare earth sources outside China, but a $96 million (approximately €84 million) rare earth agreement has faced protests in Malaysia—a Muslim-majority country—due to Washington’s Middle East policy.

In March, the U.S. Department of Defense signed a four-year agreement with Australian mining company Lynas to secure rare earth materials. These elements are crucial for modern industry, used in everything from smartphones and electric vehicles to advanced weapon systems.

Lynas’s primary processing facility is located in Gebeng on Malaysia’s east coast—the largest such facility outside China.

Activists demand Malaysia take a stance

The news of the agreement triggered protests across Malaysia, a country long supportive of Palestine and critical of Israel’s actions in Gaza and the West Bank.

Local citizens are urging the Kuala Lumpur government either to boycott the Lynas deal or to provide assurances that rare earths produced in Gebeng will not be used in any weapons systems.

In an open letter to Malaysian Prime Minister Anwar, over 50 non-governmental organizations stated the agreement could involve Malaysia in “credible allegations of violations of international law,” particularly in places like Gaza. The letter noted that the U.S. is Israel’s principal arms supplier.

However, the connection between Malaysia’s rare earths and Israeli weaponry remains unclear. Such materials can be used to manufacture fighter jets and missiles—or alternatively, household appliances like washing machines or wind turbines.

"Malaysian protesters’ demands are akin to banning rubber exports to the U.S. because rubber might end up in vehicles used by Israel in Gaza," said Thomas Kruemmer, head of Singapore-based Ginger International Trade & Investment, specializing in rare earth markets, speaking to DW.

Lynas produces key materials dysprosium and terbium

Last week, a parliamentary committee held hearings to assess whether the Lynas project would undermine "Malaysia’s reputation as a steadfast supporter of Palestine." The Anwar government now must publicly state its position on the agreement by month’s end.

"For Malaysians, this issue is less about rare earths and more about Palestine," Kruemmer said.

Activists hope to use the Gebeng refinery as leverage to pressure U.S. geopolitical interests. China currently dominates global rare earth mining and processing, and Beijing has also restricted exports of related materials to the West.

Kruemmer noted that Australia’s Lynas is among the few companies capable of supplying commercial quantities of two specific rare earths—dysprosium and terbium.

"With China halting exports of rare earths for military purposes, Lynas will become the Pentagon’s only available source at present."

When Lynas announced the agreement in March, it did not specify whether materials sold to the U.S. Department of Defense would be used in weapons.

Kruemmer estimates that given the Pentagon’s involvement, the materials are likely destined for defense applications.

Neither Lynas nor the U.S. Department of Defense has responded to DW’s inquiries.

Original article: toutiao.com/article/1871488007854276/

Disclaimer: The views expressed in this article are those of the author(s).