Asian countries, including those in Southeast Asia, are tightening their control over key minerals

JAKARTA/KUALA LUMPUR (Reuters): Malaysia will develop a policy to ban exports of rare earth raw materials to “avoid exploitation and loss of resources”, its Prime Minister Datuk Seri Anwar Ibrahim said on Monday.

Rare earth elements are a group of 17 elements used in products ranging from lasers and military equipment to magnets found in electric vehicles, wind turbines and consumer electronics such as smartphones.

Minerals are not uncommon in the Earth’s crust, but economically viable deposits are rarer. Separating them into the materials needed to produce permanent magnets used in critical products is also a complex process.

The measures adopted or announced by some Asian countries are detailed below.

MALAYSIA

The Southeast Asian country’s rare earth mineral reserve of 30,000 metric tons is just a fraction of the world’s supply and much smaller than the largest source, China, with reserves estimated at 44 million tons.

But Monday’s move is the latest by a country to restrict exports of key mineral resources.

Australia’s Lynas Rare Earths Ltd, the largest producer of rare earths outside China, has a plant in Malaysia to process the concentrate it obtains from Australia.

Malaysia has imposed restrictions on some of Lynas’ operations, citing concerns about radiation levels from cracking and leaching, which Lynas has disputed.

It was not immediately clear which rare earth product exactly Malaysia’s ban would target.

MIANMAR

In Myanmar, mines in the Pangwa region of Kachin state, the country’s largest source of rare earths, have been closed for inspections since September 4 for an unspecified period, raising concerns about short supply term.

Myanmar accounted for 4% of global rare earth mining production last year, producing 12,000 tonnes of rare earth oxide equivalent.

Tin mining in a major producing region of Myanmar was also suspended earlier this year.

INDONESIA

Indonesia has banned nickel ore exports since 2020 in an effort to maximize revenue by further processing the ore used in stainless steel and electric vehicle batteries.

Another major nickel producer, the Philippines, was considering in January taxing nickel ore exports to encourage investment in downstream sectors within the country.

PORCELAIN

In July, China announced restrictions on exports of gallium and germanium, two minor metals used to make semiconductors, raising new concerns that Beijing could potentially limit exports of other materials, particularly rare earths.

China accounted for 70% of global rare earth mining production in 2022, while it has an 85% to 90% share of magnet and processed rare earth production.

In 2010, China restricted rare earth exports to Japan following a territorial dispute, although at the time it cited environmental concerns.

Japan, the European Union and the United States successfully challenged China’s action at the World Trade Organization.

The episode prompted Japan, which had relied on China for virtually all of its rare earths, to look for alternative suppliers. It invested in Lynas and reduced the proportion of its rare earth imports from China to 58% in 2018.

China has a rare earth production quota.

(Reporting by Mai Nguyen in Hanoi Editing by Tomasz Janowski) – Reuters