Curbing unlawful activities is part of the country’s widespread effort to profit more from its mineral wealth.
Malaysia is taking a tougher stance against illicit rare earth mining and cross-border smuggling. According to the news portal Free Malaysia Today, three separate raids this week resulted in 55 arrests and the seizing of over five tons of illegally mined and processed rare earths. At these operations, the officials said the material was repackaged into sacks and mislabeled as clay and fertilizers to mislead authorities before being shipped monthly to nearby ports for export. This exploited a loophole that Natural Resources, Environment, and Climate Change Minister Nik Nazmi Nik Ahmad also highlighted recently: According to the minister, customs and law enforcement authorities would be unable to curb illegal mining and smuggling because of their inability to identify different substances. However, Ahmad emphasized that the Malaysian government is taking the necessary steps to train the responsible agencies to curb smuggling. The need to address the topic was also highlighted by earlier government findings that 16,000 tons of rare earths were illegally mined and exported in 2023.
In addition to training authorities, Ahmad highlighted the recently announced plans for two new rare earth processing plants (we reported). Illegal opportunities would be diminished because they would run on locally sourced feedstock. The only operational refinery in Malaysia is the Lynas plant in Pahang, the largest rare earth refinery outside China, which processes feedstock imported from Australia.
These measures align with Malaysia’s broader strategy to derive greater economic benefits from its mineral resources. Since 2023, the government has implemented export bans on unprocessed raw materials to encourage local value-adding industries and attract foreign investment.
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