Malaysian Prime Minister, Anwar Ibrahim, has announced a plan to restrict the export of raw minerals, particularly rare earth metals. This step is taken to prevent overexploitation and the loss of natural resources.

Rare earth metals are widely used in semiconductor chip production, electric vehicles, and military equipment. Malaysia has relatively small reserves of rare earth metals, around 30,000 metric tons, while China currently stands as the largest producer with estimated reserves of 44 million tons. Malaysia's decision comes at a time when the world is striving to diversify its rare earth metal supply, reducing dependence on China.

Anwar, as quoted by Reuters on Tuesday (12/9), stated that the government would support the development of the rare earth metal industry in Malaysia. However, there is no information available yet regarding when this export restriction policy will be implemented.

The rare earth metal industry is expected to contribute approximately MYR 9.5 billion (USD 2 billion) to Malaysia's Gross Domestic Product in 2025 and create nearly 7,000 jobs.

Anwar explained, "We will develop detailed mappings of rare earth metal sources and design a comprehensive business model that integrates upstream, midstream, and downstream industries to ensure the value chain of rare earth metals remains intact in Malaysia."

The export restriction measures taken by Malaysia could impact sales to China, which has imported about 8 percent of rare earth ore from Malaysia between January and July this year, according to Chinese customs data.

Previously, earlier this year, China also announced restrictions on the export of some metals widely used in the semiconductor industry in response to restrictions imposed by the United States on technology sales to China. This action raised concerns that China might also restrict the export of other essential minerals, including rare earth metals.

However, the concrete impact of this ban in Malaysia is still unclear due to the lack of provided details. Nonetheless, it could affect Chinese companies operating in Malaysia, as stated by analyst David Merriman from Project Blue.

What is your opinion on this topic? Share your opinion with us. Don't forget to follow Digivestasi's Instagram, TikTok, and Youtube accounts to stay updated with the latest information about economics, finance, digital technology, and digital asset investment.