SG4 open to rare earth link-up, warns against repeat of oil royalty mistakes

The SG4 Menteris Besar Council - comprising the opposition-led states of Terengganu, Kedah, Kelantan, and Perlis - has stressed that past mistakes, particularly those involving oil royalty agreements, must not be repeated in the management of rare earth elements (REE).

The council reaffirmed that all REE resources located within state boundaries belong to the respective states, as stipulated under the Ninth Schedule of the Federal Constitution.

“With these four states collectively representing 70 percent of Malaysia’s REE reserves, SG4 is committed to ensuring that this natural wealth is managed responsibly, sustainably, and in a way that delivers maximum benefits to the people and future generations,” it said.

While expressing support for the federal government’s ambition to build a comprehensive upstream, midstream, and downstream ecosystem for Malaysia’s REE industry, the council insisted that any national plan must respect the rights of resource-owning states and cannot proceed without formal engagement with the state governments.

“SG4 remains open to collaborating with the federal government in the spirit of fair and respectful federalism. However, we insist that past experiences - particularly regarding oil royalty agreements - must not be repeated in the REE sector.

“The management and distribution of revenues must be guided by principles of transparency, fairness, and equitable profit-sharing,” it added.

The council emphasised that REE industry development should take place within the resource-owning states to ensure that the resulting economic spillover and industrial growth benefit local communities.

State earnings, it said, should not be limited to royalties, but must also include equity participation, profit-sharing, and tangible technology transfer to the states and their people.

The council also urged that any national-level REE development plans or international negotiations respect state rights and include representatives from the resource-owning states at every stage of planning and implementation.

The statement was signed by SG4 chairperson and Terengganu Menteri Besar Ahmad Samsuri Mokhtar, Kelantan Menteri Besar Nassuruddin Daud, Kedah Menteri Besar Sanusi Nor, and Perlis Menteri Besar Shukri Ramli.

Reciprocal trade pact

On Oct 26, Prime Minister Anwar Ibrahim and US President Donald Trump signed a reciprocal trade agreement, which, among other provisions, states that Malaysia would not impose export quotas on critical minerals and rare earths to the US.

Article 6.2 of the agreement further outlines Malaysia’s commitment to collaborate with US companies in critical mineral extraction and facilitate the supply of REE to the US.

Yesterday, Kelantan Deputy Menteri Besar Fadzil Hassan voiced concern over the trade deal, warning that the state’s REE resources could be exploited without fair compensation - echoing the petroleum royalty dispute.

“We are still scarred by the loss of revenue from petroleum royalties. It is one of the greatest injustices committed against the people and the government of Kelantan. So, will this painful history be repeated?

“We will not allow REE to become the 'second petroleum'. This state cannot once again be a mere spectator to its own wealth taken away by others,” he said.

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