But will anyone in KL listen to the obvious logic - OR is China...

But will anyone in KL listen to the obvious logic - OR is China systematically interfering in Malaysia’s government processes?

Losing the high-value rare earths business

LETTERS The Star Malaysia
Saturday, 13 Mar 2021
THE global economy is driven by disruptive change. What is disturbing is many of those in positions of power still lack the skills to understand the big picture, as evident from discussions even in Parliament. Based on this, I often wonder how constructive debates on charting the way forward for the nation’s economy can be done.

We have been trying for years to escape the middle income trap. The nation, as far as I can recollect, has gone through a number of economic transformation plans, but mostly with limited success.

Most of the plans have been derailed by poor policy-making and implementation.

One good example is the continued misunderstanding of the rare earths industry. Many are still clueless about the opportunities this industry offers. Instead, they continue to harp on baseless claims about the threat of radiation from wastes of rare earths processing.

It was Deng Xiaoping who first declared that rare earths would bring economic prosperity. He clearly had the foresight about rare earths becoming a valuable material in the global economy. China is now profiting tremendously from their rare earths.

In fact, when China negotiated the trade deal with the United States, rare earths were used as one of their bargaining chips.

This is because industries in the US depend on the rare earths imported from China for many of their products. The US does not produce much rare earths, a material that has also become critical in the manufacture of their military arsenals.

Rare earth elements are now much sought after in the automotive industry, as the transport sector migrates from fuel combustion engine to the electric motor.

This change is happening very fast, as all the major car companies in the world have literally committed to changing to electric in the next five years.

A critical component of the electric motor is the magnet, a high-powered super magnet to be precise, for which rare earths have emerged as a crucial constituent.

These are the rare earths that Malaysia now processes through the company Lynas. At the moment, we do not have our own rare earths mine. But this may change, as we have been reading reports of big rare earths finds in some states.

Lynas has been bringing in rare earths concentrate from Australia to be refined at its plant in Kuantan. The unfortunate part is that Lynas has been constantly harassed because of some wastes that the plant produces.

Despite a study by soil scientists at Universiti Putra Malaysia, which demonstrated that the residues contain high amounts of phosphates that can be used as fertilisers for oil palm, Lynas has not been given permission to supply to the palm oil business.

It is clear that rare earths have become a key ingredient in the global high technology economy. The highest value of the rare earths is in downstream product manufacturing, including super magnets.

The latest I hear is that a major Japanese company making super magnets that buys rare earths from Lynas has set up shop in Vietnam.

PROF DATUK DR AHMAD IBRAHIM m Fellow Academy of Sciences Malaysia