Two pro-Palestine advocates said Malaysia should impose restrictions on the export of rare earth materials processed by Lynas Rare Earths.

This comes after the company signed a binding letter of intent with the US Department of Defense to finalise a four-year agreement to supply the US defence sector with rare earth minerals.

Academic and chairperson of the Boycott Divestment & Sanctions Malaysia (BDS), Nazari Ismail argued that the business deal is also a challenge to Malaysia's spirit of non-aligned foreign policy.

"Yes, the Malaysian government should impose some form of restriction on the export of Lynas' output. It should not supply countries that use them for illegal military operations.

"Clearly, the US is now engaged in military operations after it carried out an unprovoked attack on Iran," he told Malaysiakini.

Nazari also concurred that while this could lead to diplomatic repercussions, he said it was "normal when you stand up for justice and hold on to moral principles”.

He added that Putrajaya should be concerned about the deal inked by Lynas, given the US' role in the deadly bomb strike on two schools in Iran, which resulted in the deaths of over 100 schoolchildren.

Nazari mentioned that since Lynas holds an operating license issued by Putrajaya, the terms of that license should be revisited to include restrictions on who the end buyers of the processed materials can be.

"As stated earlier, the output should not be sold to buyers who plan to use it for illegal military campaigns," he added.

Former PKR vice-president and fellow pro-Palestine activist, Tian Chua also echoed Nazari's sentiments.

"It is quite clear that the supply of rare earth elements (REE) to the US Department of Defense for security purposes would include weaponry production.

This agreement could potentially drag Malaysia into the US supply and production chain of war machinery.

"Malaysia could impose some additional export conditions to prevent REE products from being shipped to US defence industries," Chua said when contacted.

He acknowledged that while existing law may not provide a clear legal mechanism to prevent Lynas - a private, foreign-listed company - from entering into a commercial agreement with the US defence establishment, Malaysia is not absolved of responsibility due to the absence of a clear legal remedy.

"Malaysia has a lot of leverage as the US is currently a country committing war crimes. Our refusal to allow Lynas from supporting the military complex will earn us international and domestic credit.

"Our neutrality means we are open in the REE market, and we will continue to prevent China's monopoly in REE. However, the bottom line is that our industrial production and resources should not be supplying to a mass-murdering industry," he added.

Malaysiakini has contacted Lynas for comments.

What the deal is about

On March 16, Lynas said the letter of intent establishes a framework to finalise an agreement for the supply of light and heavy rare earth oxides to support US national security and supply chain resilience objectives.




Under this arrangement, the Department of Defense will set aside about US$96 million (RM377.62 million) to purchase rare earth oxides from Lynas.

Lynas said the agreement followed a mutual decision with the Pentagon to modify an earlier agreement, due to “significant uncertainty” on whether plans to build a heavy rare earth processing facility in Seadrif, Texas, would proceed.

The statement also mentions that neodymium-praseodymium (NdPr) oxides will have a floor price of US$110 per kg (RM431) under the arrangement.

For comparison, its benchmark price generally hovered between US$60 (RM235) and US$80 (RM313) per kg last year, though it briefly reached as high as US$128 (RM501) per kg this year.

The mineral is a crucial raw ingredient for making powerful magnets needed for electric motors, actuators, and other applications.

Bloomberg Intelligence reported on March 2 that China dominates 90 percent of the world’s NdPr supply, but upcoming supplies from Australia and the US are likely to slash China’s market share to 69 percent by 2030.

Lynas mines rare earth minerals from Mt Weld, West Australia, processes them, and then ships them for refining and separation into rare earth oxides at the Lynas Advanced Materials Plant in Gebeng, Pahang.

The facility in Gebeng is not only capable of producing light rare earth elements but is also the only significant producer of heavy rare earth elements outside China, and therefore the only producer not subject to China’s export controls on critical minerals.

Producing: https://www.malaysiakini.com/news/710076

However, the facility has faced significant opposition from environmental activists, particularly on issues surrounding the disposal of radioactive residue from its water leach purification (WLP) process.

Opposition: Link:https://www.malaysiakini.com/news/769569

Putrajaya granted the facility a 10-year extension of its licence beginning March 3, but on the condition that it reduces the radioactivity of the WLP residue below regulatory limits by extracting the radioactive element thorium from the waste.

Extension: Link:https://www.malaysiakini.com/news/769265

Moving forward, Lynas will also be required to complete the thorium extraction process in Australia before shipping it for further processing in Malaysia.

Complete: Link:https://www.malaysiakini.com/news/768477

/ends


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