KUALA LUMPUR, March 5, 2026, 15:39 MYT
- Malaysia’s trade ministry said on this day that U.S. trade and critical minerals commitments have no impact on the technical conditions imposed on Lynas Malaysia.
- That clarification followed just days after Malaysia granted Lynas a fresh 10-year operating licence.
- The ministry says Khazanah’s discussions with Chinese companies about rare-earth development are still in the early stages.
Malaysia’s Investment, Trade and Industry Ministry insisted that its Agreement on Reciprocal Trade (ART) and the critical minerals memorandum with the United States won’t interfere with the government’s technical enforcement on Lynas Rare Earths Limited’s local operations. “This agreement includes fair and equitable treatment for investors,” the ministry told the Dewan Negara, but stressed that projects are still subject to environmental, social and governance requirements. The ministry also noted that talks between state investor Khazanah Nasional and Chinese firms on rare earths are still preliminary—no deal has been finalized. BERNAMA
The clarification carries weight: Lynas operates one of the largest rare-earths processing facilities outside China, right in a country where its waste practices have sparked political debate for years. Rare earths—these metals go into permanent magnets, electronics, electric motors, even some defense systems.
Lynas secured a 10-year extension on its Malaysia operating licence starting March 3, but faces strict deadlines to halt radioactive waste production and process existing residue—either by extracting thorium or through other sanctioned techniques. CEO and Managing Director Amanda Lacaze called the extended licence “provides greater investment certainty” for both Lynas and its customers, while expressing gratitude to the Malaysian government for its handling. Reuters
Efforts to strengthen mineral ties between the U.S. and Malaysia are underway, with the two countries also in broader trade discussions. According to a U.S. government summary of the critical minerals MoU, the arrangement promotes collaboration on regulatory issues, permitting processes, sustainability, recycling, recovery, and building what it calls “high-standard marketplaces”—that includes better price transparency. Meanwhile, MITI’s ART page describes the deal as a move to stabilize trade relations and safeguard Malaysian export access. Trade.gov
The ministry, in a parliamentary reply, listed cooperation under the MoU as covering good regulatory practices—everything from mining permits to land purchases and manufacturing licences tied to the rare-earth industry. According to the ministry, both countries are focused on boosting the sector, but actual sales decisions for rare-earth products will remain with the designated authorities.
Lynas sources ore from Mt Weld in Western Australia, processing it both there and in Malaysia. The Malaysian facility handles separation and produces specific rare-earth products for buyers. With governments urging reduced dependence on China, the company is working on expanding processing operations beyond Malaysia.
Still, the Malaysian licence isn’t a free pass. The real test for Lynas goes well beyond approvals: success depends on whether it can ramp up thorium removal and neutralise residue fast enough to satisfy the government’s schedule—without running into spiralling costs or setbacks that could trigger another wave of political scrutiny.
The ministry’s statement comes as Malaysia considers aligning with multiple major powers. Lawmakers heard that Khazanah is assessing various strategic collaboration models, looking closely at governance and control arrangements. So far, no agreement has been reached on heavy rare-earth separation technology transfer.
In Washington, a spotlight has landed on the security of critical minerals. The Pentagon issued a call for proposals this week aimed at ramping up domestic output of 13 key minerals—a list that includes rare-earth elements like gadolinium, samarium and yttrium. The effort marks a clear attempt to reduce U.S. reliance on China for these strategic materials.
