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Malaysia's ban on raw rare earths exports remains despite US deal, trade minister says

29th October 2025

By: Reuters

  

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KUALA LUMPUR - Malaysia will maintain a ban on the export of raw rare earths to protect its domestic resources, despite signing a critical minerals deal with the United States this week, the trade minister said on Wednesday.

Speaking in parliament, Minister Tengku Zafrul Aziz dismissed allegations that Malaysia will allow the export of critical minerals and rare earths to the United States in pursuit of immediate profits or strategic goals.

"We no longer want to be a country that only digs and ships out cheap raw materials like in the past," Tengku Zafrul said, reiterating that Malaysia will instead encourage foreign investment and technology sharing for the mining and processing of raw rare earths.

"Our policy is not to prevent trade forever," he said. "Our policy is to prevent the export of cheap unprocessed raw materials so that value is added to Malaysia."

Malaysia has some 16.1-million metric tons of rare earth deposits, according to government estimates, but lacks the technology to mine and process them. Rare earth materials are essential for high-tech manufacturing, including electric vehicles, semiconductors and missiles.

Reuters reported earlier this month that Malaysia was in talks with China on rare earths processing, saying Malaysian sovereign wealth fund Khazanah Nasional would partner with a Chinese firm to build a refinery in Malaysia.

The United States signed separate deals with Malaysia and Thailand during US President Donald Trump's visit to Kuala Lumpur on Sunday, seeking cooperation to diversify critical minerals supply chains amid competing efforts from China.

According to a joint statement by the United States and Malaysia, the Southeast Asian country agreed to refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the United States.

Edited by Reuters

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