Govt won't set up another 'Petronas' for REE industry - Nik Nazmi

PARLIAMENT | The government has pledged that it will not set up another monopoly such as Petronas for the country’s rare-earth elements (REE) industry.

Natural Resources and Environment Sustainability Minister Nik Nazmi Nik Ahmad told the Dewan Rakyat that despite the government’s aspirations for the REE industry to emulate the country’s oil and gas scene, any initiative has to be guided by the Mineral Development Act 1994.

“I remember that was the aspiration, but the government will take action, although there are various proposals raised by some YBs to create a Petronas-like entity for REE. This won’t happen because we want to utilise the existing Mineral Development Act.

“Whatever happens, we will go through the Mineral Development Act 1994 to make improvements, but we do not intend to create a monopoly or similar company,” he said.

Commenting on the potential of the local REE mining industry, Nik Nazmi pointed to a pilot project in Kenering, Perak, which is allowed to export REE and is still looking for investors as preliminary discussions with local and international mining companies are still ongoing.

“However, due to the existing stock that has already been mined, special permission has been given for a reasonable period for them to export,” he said.

On Sept 27, Perak Menteri Besar Saarani Mohamad said the pilot project covering an area of 78ha has generated almost RM16 million in royalty for the Perak government.

He also said the revenue was from the export of rare earth carbonate (REC) to China until last July.

The minister’s remarks aligned with Prime Minister Anwar Ibrahim’s aspiration as the latter previously said that Malaysia should fully leverage the vast potential of the local REE industry.

Anwar emphasised that collaborations with international experts should aim to develop the entire industry chain within the country.

Lynas ready to process local REE

Nik Nazmi also said that Australian rare earths mining firm Lynas Corporation has expressed its readiness to process local REE in Malaysia.

Responding to Kuala Terengganu MP Ahmad Amzad Hashim’s supplementary question, the minister said that Lynas’ current plant can only process Australian REE and said it is different from the local ones.

“Lynas has expressed its commitment to opening another line to process REE from Malaysia, but we have stated that any such action must comply with strict environmental, safety, and health requirements,” he said.

However, Nik Nazmi said that the government is still in discussion with the mining giant to extend its licence for a longer period.

He further said that such an initiative requires a large amount of investment to make it an attractive product or face the risk of closure within two or three years after launching the plant.

“Not only do they (Lynas), (we) have companies like Super Magnet, and so on, that also want to open factories in Malaysia because they see a future here, but currently, the products from Lynas in Malaysia are sourced from Australia.

“We process them and then sell them to Vietnam, Japan, and several other countries,” he said.

Lynas had its operating licence renewed in October last year.

This renewal, valid until March 2026, is contingent upon the company’s adherence to strict regulations regarding the disposal of radioactive waste.

The government aims to complete the construction of a permanent disposal facility for Lynas’ waste by the end of this year.

No federal govt intervention

Responding to a question from Kota Bharu MP Takiyuddin Hassan, Nik Nazmi said that the federal government will not interfere with the REE mining operations on state levels since it falls under respective states’ jurisdictions.

However, Nik Nazmi said when it comes to issues like exports, the federal government has to intervene to ensure that the process is according to the Mineral Development Act 1994.

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