KUALA LUMPUR, Malaysia will maintain its ban on the export of raw rare earth elements (REE) to ensure that value-added processing and downstream development take place domestically, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
He said the policy aims to strengthen Malaysia’s industrial base while promoting sustainable growth and technological advancement in the REE sector.
“At the same time, we continue to welcome foreign investment and technology partnerships in the mining and processing of REE to help build a complete and competitive domestic ecosystem,” Zafrul said during a special briefing session on the Malaysia-US Reciprocal Trade Agreement (ART) in the Dewan Rakyat on Wednesday.
“Malaysia values strategic collaboration with the US and other nations in developing the local REE industry, including potential trilateral cooperation involving Malaysia, the US, and Australia, such as with Lynas,” he added.
The minister stressed that Malaysia’s policy seeks to avoid the export of unprocessed, low-value raw materials, ensuring that the country benefits first from local processing and value creation.
“The same principle applies to REE and other critical minerals. Once processing and value addition are completed in Malaysia according to our laws and standards, the resulting high-value products can be exported as part of global supply chains,” he said.
Addressing concerns regarding the Malaysia-US ART, Zafrul clarified that the agreement will be implemented in accordance with Malaysia’s national laws and strategic priorities to safeguard domestic interests while expanding new trade opportunities.
He also noted that the list of proposed procurements under the ART does not involve new government expenditure, but instead reflects commercial arrangements by private sector players.
“For instance, Malaysia Aviation Group’s purchase of Boeing aircraft was announced in March 2025, well before the tariff announcement by US President Donald Trump,” he said.
“Similarly, Petronas’ decision to procure liquefied natural gas (LNG) from the US forms part of its strategy to ensure supply security and fulfil its domestic and international obligations. It was a commercial decision — not a political one,” he added.
Zafrul further emphasised that under the ART framework, Malaysia is now recognised as a “trusted supply chain partner”, which is expected to facilitate smoother trade flows, especially for strategic and high-technology goods.
“This recognition strengthens Malaysia’s position as a regional investment hub and preferred destination for companies seeking to access the US market,” he said.
He added that Malaysia’s strong commitment under the ART would also be taken into account in the US government’s ongoing investigation into the semiconductor sector under Section 232 of the US Trade Expansion Act 1962, which is expected to conclude by the end of 2025.
