Kelantan govt seals rare earths pact with Lynas

Free Malaysia Today

30-05-2025

Lynas Rare Earths CEO and managing director Amanda Lacaze said Malaysia is already recognised as a rare earths centre of excellence through Lynas's operations. (AP pic)
PETALING JAYA : The Kelantan government's investment arm has struck an agreement with Australia's Lynas Rare Earths Ltd to develop the state's rare earth resources that are essential for high-tech industries.
The Australian mining company said today it has signed a memorandum of understanding with the state's Menteri Besar Inc (MB Inc) that provides a framework to negotiate a deal for the future supply of mixed rare-earths carbonate feedstock to Lynas.
Under the non-binding agreement, the parties will cooperate on the growth of the rare earths industry in Kelantan and work towards developing Malaysia's locally sourced and separated rare earth products.
'Malaysia's ionic clay deposits have excellent potential as future feedstock for Lynas Malaysia, particularly given their high proportion of heavy rare earths which are in demand for future facing technologies including electric vehicles and electronics,' Lynas CEO Amanda Lacaze said in a statement.
She said this initiative brings together Lynas Malaysia's expertise on the rare earths industry spanning more than a decade and Kelantan's rare earth resources.
'We look forward to working with MB Inc to ensure the (rare earths) it produces meets the high environmental and technical standards required by Lynas and our customers in Malaysia as well as global manufacturing supply chains,' she added.
Lynas has been operating a processing plant on the outskirts of Kuantan, Pahang, since 2012. The miner currently sources all of its rare earths from the Mt Weld mine in Western Australia.
The Kelantan land and minerals office previously stated that rare earth elements have been found in large quantities in Jeli and Gua Musang.
Last December, the department said it deployed drones to monitor remote locations identified as having rare earth elements to prevent illegal mining activities.
News reports then indicated police had arrested 55 individuals after uncovering an illegal rare earth mining operation in Gua Musang.
Meanwhile, the federal government is encouraging state administrations to allow rare earth mining. Outgoing natural resources and environmental sustainability minister Nik Nazmi Nik Ahmad was reported to have said Malaysia aims to position itself as a regional hub for rare earth mining and processing.
'Lynas's plant in Malaysia is the first plant outside China that can process heavy rare earth elements,' he said during a visit to the Lynas plant earlier this month.
He added this achievement increased the nation's competitiveness in the rare earth elements market.
Rare earths and geopolitics
Geopolitical tension is fuelling interest in finding new sources of rare earths supply. After the US slapped ultra-high reciprocal tariffs on China last month, the Asian giant retaliated by tightening restrictions on the export of rare-earth materials, targeting US manufacturers, including Tesla.
With the Trump administration now having a truce with China over its tariffs, exports of rare earths restarted this month for some companies.
China remains in the driving seat as it currently refines almost all of the world's heavy rare earth elements, including dysprosium and terbium.
Lynas has been seeking to break that stranglehold, and recently began commissioning a new separation circuit that will make it the only commercial producer of separated heavy rare earth products outside of China.
Ironically, the opposition-controlled state of Kelantan may turn out to be a starting point in helping the US and its allies break China's virtual monopoly in rare earth elements.