MALAYSIA’S rare earth elements (REE) industry continues to face major structural challenges — ranging from lack of domestic technology to strict environmental protections hinder efforts to unlock the sector’s estimated RM747 billion potential, said Natural Resources and Environmental Sustainability Minister Datuk Seri Johari Abdul Ghani according to a report by The Malaysian Reserve.
He was responding to Kubang Pasu MP Datuk Ku Abd Rahman Ku Ismail, who asked about the key obstacles in developing the REE sector and the government’s strategy to overcome them. Johari noted that Malaysia is still constrained at multiple levels of the value chain.
The report noted that environmental restrictions present another major hurdle, with 94% of Malaysia’s REE deposits located within forest reserves.
“Mining is not allowed in reserve forests, water catchments and conservation areas. This protects the environment, but it limits where the industry can develop,” he said.
To overcome these challenges, Johari said the government has adopted a phased REE industry development strategy, covering short-term (2025–2027), medium-term (2027–2030) and long-term (post-2030) plans.
“The current priority is to maintain the moratorium on raw REE exports while Malaysia strengthens its investment ecosystem and builds domestic processing capability,” he said.
