【By Guan察者网, Ruan Jiaqi】

With the growing demand for critical minerals used in semiconductor chips, electric vehicles, and military equipment around the world, Malaysia has been seeking to develop its own capabilities in rare earth mining and processing to seize this market opportunity.

According to Reuters on the 28th, Johari Abdul Ghani, the acting minister of Natural Resources and Environment Sustainability of Malaysia, revealed on Wednesday that China is willing to provide technical and process assistance in rare earth processing to the country. He emphasized that the cooperation would be limited to state-owned enterprises between the two countries.

Johari currently serves as the Minister of Plantation Industry and Commodities of Malaysia. After the previous Minister of Resources, Nik Nazmi bin Nik Ahmad, announced his resignation in May following the failure in the party election, Prime Minister Anwar appointed Johari as the acting minister of the department in July to prevent the government from halting operations.

According to reports, Johari stated in a written parliamentary reply on Wednesday that China has conveyed its willingness to support Malaysia's goal of developing its rare earth industry.

"Considering the importance of technological protection for China, the cooperation will only involve state-owned enterprises affiliated with the governments of both countries," he added. He also mentioned that the current negotiations are still in the preliminary stage, and no agreement has been reached yet.

Johari pointed out that given China's dominant position in the global rare earth field, especially its advantages in rare earth element separation technology, the aid from China is of great significance for Malaysia.

Johari also said that this cooperation would enhance Malaysia's international reputation in the rare earth sector, making it the only country in the world that simultaneously possesses both Chinese and non-Chinese rare earth processing technologies.

The term "non-Chinese" cooperation refers to the rare earth processing plant established by Australian company Lynas in Malaysia, which is the largest rare earth producer outside of China. In May this year, Lynas separated dysprosium oxide at its Malaysian factory, making it the only company outside of China capable of commercial production of "heavy rare earths."

In another parliamentary reply on Wednesday, Johari revealed that according to geological assessment data conducted by the Malaysian Mineral and Geological Science Department in 2019, the country's rare earth reserves are approximately 161 million tons. The government previously estimated them at about 80 billion ringgits (approximately 1.219 trillion yuan), but more research is still needed to determine the scale of exploitable reserves.

Additionally, Malaysia has implemented policies that prohibit rare earth mining activities in permanent forests, environmentally sensitive areas, and nature reserves.

To expand the value chain, Malaysia hopes to establish an end-to-end rare earth industry supply chain, completing processing and mining domestically, and only exporting finished products such as super magnets. In 2023, Anwar announced a complete ban on the export of raw rare earth minerals to persuade investors to set up rare earth processing and manufacturing factories in Malaysia.

Last October, former Minister of Natural Resources and Environment Sustainability of Malaysia, Nik Nazmi, admitted that Malaysia needs Chinese technology to develop its domestic rare earth industry supply chain, but this could face the risk of U.S. opposition.

According to a report by Hong Kong media South China Morning Post, Nik Nazmi said that many technologies in rare earth processing and mining are in the hands of China, and "in many ways, they are the most competitive." However, due to "certain countries' restrictive measures," if Malaysia uses Chinese technology for mining, its rare earth products may face trade restrictions when exported.

The report said that he was referring to the sanctions and tariffs imposed by the United States and its Western allies to curb China's growing economic and geopolitical influence.

However, Nik Nazmi mentioned that using only Chinese technology does not mean that Malaysia can trade more easily with China, because all rare earth mining that Chinese companies conduct must be processed in China, he said. Malaysia is adjusting its policies accordingly to expand industrial profits and market share.

Previously, Singapore's Straits Times analyzed that although many countries have rare earth processing technology, Malaysia has all 17 types of rare earth elements underground, while China is the only country with mature production capacity for all 17 types of rare earths, and has already started refining Malaysia's mineral deposits. Malaysia cannot refine all rare earth elements by cooperating with other countries, and the value generated would be lower.

Straits Times believes that considering China's experience in processing ores, China is likely to have the most effective solution for establishing a factory in Malaysia, but the specific cooperation methods remain to be observed.

It should be noted that at the end of 2023, the Ministry of Commerce and the Ministry of Science and Technology of China issued an announcement regarding the publication of the "Directory of Prohibited and Restricted Export Technologies of China." In the prohibited export section, "technologies for the refining, processing, and utilization of rare earths" were listed, specifically involving rare earth extraction and separation process technologies; production technologies for rare earth metals and alloys; technologies for producing samarium-cobalt, neodymium-iron-boron, cerium magnets, and rare earth calcium borate.

Regarding the revision of the "Directory of Prohibited and Restricted Export Technologies of China," the spokesperson for the Chinese Foreign Ministry stated that this revision of the prohibited and restricted export technology directory is a specific measure and routine adjustment made by China to adapt to changes in the development of technology, and China has always adhered to promoting reform and development through openness. On the basis of safeguarding national economic security and development interests, China will create positive conditions for promoting international trade and economic cooperation.

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Original: https://www.toutiao.com/article/7543917369702220314/

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