Malaysia considers limited exports of unprocessed rare earths to boost supply chain leverage

Malaysia has maintained a ban on raw rare earth element exports since October 2025, a policy aimed at forcing value-adding activity onto Malaysian soil. The country now appears open to carving out exceptions that would strengthen its position in an increasingly geopolitical supply chain. The rare earth chess match Malaysia sits on an estimated 16.1 million metric tons of rare earth deposits, making it the third-largest holder globally. In 2025, Malaysia became the first non-Chinese producer of dysprosium oxide, a heavy rare earth element essential for permanent magnets used in electric vehicles and wind turbines. China controls over 85% of global rare earth processing. International partnerships and price floors Malaysia signed a critical minerals Memorandum of Understanding with the United States in 2025, and in July 2026 it struck new partnerships with France’s Carester and Belgian entities focused on processing technology transfers and rare earth separation plants. American firms have secured offtake agreements with Malaysian operations, including price floors set at $110 per kilogram for certain rare earth oxides. Lynas, the Australian mining company that operates rare earth pr...