Kelantan to start rare earth mining next year, Kedah presses Putrajaya on policy

Kelantan expects two locally owned companies to begin rare earth element (REE) mining next year, while Kedah has urged Putrajaya to expedite industry policies to unlock potential state revenue.

The developments come amid renewed calls by the four Perikatan Nasional-led states under the SG4 economic grouping for greater control over their natural resources and development priorities.

According to Bernama, Kelantan Deputy Menteri Besar Fadzli Hassan said the two companies would carry out mining activities in collaboration with Kelantan Menteri Besar Incorporated.

Both companies were in the final stages of obtaining environmental impact assessment (EIA) approval from the Environment Department.

"We already have two licensed local companies to undertake REE production. We also have our own method of marketing the minerals once they are extracted," Fadzli told reporters in Kota Bharu after the state legislative assembly sitting today.

He did not identify the companies or their proposed mining sites.

Meanwhile, Kedah Menteri Besar Sanusi Nor said delays in federal policies were holding back investment and potential revenue.

Berita Harian reported him saying that several companies in Kedah had completed REE exploration and were preparing to move into mining.

"We hope this policy can be expedited because investors have already come in and completed the exploration process.

"When they seek mining licences, they must prepare mining plans, EIAs, and fulfil various other requirements.

"When the approval process takes time, mining activities are also delayed, and the state has to wait longer to generate new revenue," Sanusi said after attending the Greater Kedah Lecture Series in Alor Setar today.

Push for greater autonomy

Kedah and Kelantan are part of SG4, an economic cooperation platform that also comprises PN-led Terengganu and Perlis.

At the SG4 Business and Economic Forum in Kuala Lumpur on Monday, Sanusi accused Putrajaya of invoking national security concerns to prevent states from exploiting their REE resources.

According to HarakahDaily, he argued that states should have greater autonomy to develop their mineral wealth rather than depend heavily on federal allocations.

SG4 leaders also outlined plans at the forum to strengthen economic cooperation, targeting a combined gross domestic product of RM723 billion by 2050.

Kedah seeks downstream REE industry

Sanusi said Kedah wanted to develop downstream REE industries to process the minerals locally instead of exporting them as raw materials.

"We have the Lynas plant, and there will be investors ready at any time if they receive approval to carry out the separation of the 17 elements here.

"We want these elements to be separated here so that downstream REE projects can be developed. We do not want to sell raw materials alone," he said.

Sanusi also reportedly said he received information that a federal government-linked company could take over management of the country's REE industry, although he acknowledged that this had not been officially confirmed.

Malaysia currently restricts raw REE exports to encourage domestic processing, although Putrajaya has considered conditional exemptions linked to investment and technology transfer.

The government has estimated Malaysia's REE resources at 16.1 million tonnes, with a potential value of RM970 billion.

Separately, Economy Minister Akmal Nasrullah Nasir today rejected claims that Putrajaya had sidelined the SG4 states, saying federal development expenditure was 6.8 times higher than their combined state development spending.

According to Bernama, Akmal told the Dewan Rakyat that the federal government also funded major infrastructure and industrial developments, including projects in Tok Bali, Kelantan, and Kulim, Kedah.

He was responding to Bachok MP Syahir Che Sulaiman's call for the government to maintain at least 50 percent of development allocations for the SG4 states, as well as Sabah and Sarawak.

Akmal said allocations should be based on each state's development needs rather than assessed solely by their monetary value.

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