- 5 months ago
Malaysia holds an estimated RM1 trillion in Rare Earth Elements — critical minerals that power everything from electric vehicles to defence systems. As global demand surges, can Malaysia turn this natural wealth into lasting economic and strategic strength? We speak to Tan Sri Dr Ir Ahmad Tajuddin Ali and Datuk Ir Abdul Rashid Musa to explore the opportunities, challenges, and future of REE in Malaysia
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00:00all right thank you for tuning in into Niagawani and right now we want to discuss on an important
00:13topic which is how we can optimize Malaysia's rare earth element potential and rare earth elements or
00:19REE may sound like something out of science textbooks but in reality they're the quiet
00:24drivers of our modern lives like powering electric vehicles wind turbines smartphones and also like
00:31critical defense systems as a whole but as the world races towards green technology and also
00:35advanced manufacturing demand for these minerals is set to skyrocket which turns them into one of
00:42the most strategic source resources of our time but the real question now is how do we turn this
00:48natural advantage into lasting economic and also strategic strength so to discuss this we're joined
00:54today by two honorable guests on my right is Tan Sri Dr. Insignor Ahmad Tajuddin Ali the joint chairman
00:59for MIT and also on his right is Datuk Insignor Abdul Rashid Musa the head of strategy SIMUMW and also
01:04the chairman for automotive productivity Nexus how are you good morning thank you for joining me in the
01:11studio this morning it's an honor but if I could start this whole conversation with Tan Sri what's the
01:17big deal with the rare earth elements or this REE and why are they so important to the world right
01:22now and it is such a global interest well first thank you to Astro for inviting us to discuss this
01:31topic of rare earth elements and where on how we as a nation can play in this industry well rare earth has
01:44been there since the beginning but in a way it is new although for me it is where maybe where I started my
01:52career because way back in this in the 70s 80s there was this company that started the production of
02:03rare earth elements in Perak a Japanese company and I was at that time with the nuclear institute and
02:13because of the presence of radioactive elements in the in the process as you were although they are
02:23natural but it is there we were called upon to to help you know particularly on public concerns about
02:33radioactivity and so on so been 30 plus years for me yeah in this then of course the the the investment in
02:43in in in Pahang in Gebeng by Lainas which also became a public issue and so has been this this
02:54problem as you as when it comes to rare earth in this country rare earth consists of a few elements in the
03:04periodic table from a scientific point of view it's there it's naturally occurring and and it can be extracted
03:12and in this country we have we have been estimated quite substantial reserve of rare earth so there is a
03:20potential but up to now we have only extracted the one from the 10 telling from the amongst and so on
03:27but that also has has stopped but the one that we are processing in uh Gebeng now not we are pressing but a
03:34company an Australian company that is set up there that is processing uh is the only industry that we have in
03:41this country as it were uh into rare earth so rare earth uh you know in this industry there are three
03:48stages uh there's upstream downstream uh midstream and downstream upstream is about the mining and
03:54that's what we want to talk about today midstream is about the processing of that mine product you know like
04:00like the one that's happening in in uh Gebeng now in Lainas uh uh as a factory and downstream is what what
04:07products do we make from using this rare earth that does not exist yet in Malaysia is that that rare
04:14earth that we produce from Gebeng is sent overseas to make those downstream products as you mentioned
04:19earlier for use in like uh you know evs and uh all the various applications where where so it's very
04:27important the strategy for the country uh at the moment we are one of the two players in the world
04:33in this area we'll come to that later like you mentioned REE has been there for decades but right
04:39now the demand is just you know of the ceiling and Malaysia is sitting on one trillion ringgit worth of
04:44REE and honestly that's huge so with potential to build entire industries the magnets motors and
04:50green tech manufacturing for example um how do we make sure it actually benefits the country long term
04:55and not just a short term resource boom okay thank you again um for inviting me uh i would like to share
05:04some applications mentioned by Tan Sri just now it's huge especially the new uh so-called uh economy
05:11in green economy because the finished product the downstream not many people are aware that even in in a
05:16car today the kilos of actually rare earth that makes the finished product like sensors ev motors and so on
05:24and the potential is huge and it can create as Tan Sri said a new economy for the country that have a
05:30very high multiplier effect and then these downstream activities the multiplier is very high that can
05:36create as i said the three uh three things that three ease i call it the first is about employment
05:42the high level high skill employment for countries in the economy second is about the ecosystem
05:47whereby the multiplier for you know tier two tier three and even downstream activities and the third is
05:53actually the potential for export the reserve is huge as mentioned more than one trillion but that is
05:59at raw material level if we go higher to down to downstream the multiplier will be higher and it can reach up
06:08to 100 billion a trillion of value yeah so this actually can be malaysia has this opportunity to become a key
06:15player taking advantage from the current geopolitical uh issue we can be the third force
06:23in the world actually if you want to focus on developing this industry and we need a whole of
06:28nation approach to do this and nevertheless it come with challenges a cooperation between state and federal
06:37government uh second we need to prepare the new talents and third we need to develop an appropriate
06:43infrastructure and last but not least we need to establish a new act and policy
06:49so that it can support the industry to grow that's a whole new big opportunities for
06:53malaysia right definitely so but for tan sri maybe you can share or enlighten us on why the need for
06:59technology sovereignty in ree rather elements and we see that china right now controls most of the global
07:06ree supply which is about 80 percent and why is it so important for malaysia to actually build our own
07:12uh technological capabilities in this space especially for economic also strategic industries well the
07:19potential as i mentioned earlier the potential is there because we have this resource we are among the
07:25the few countries in the world that is that we know that we are one of the uh top as far as the
07:32rare earth element present in the ground yeah so the first challenge is to take it out of the ground
07:39and as uh that was mentioned uh when it comes to mining it is uh state matter and so there needs
07:47to be a national resolve of one malaysia uh kind of uh approach that uh that uh will enable us to
07:54extract the what is in the ground in the ground so downstream manufacture uh mining of the rare earth
08:00and we must be able to do it in a way that is safe that is environmentally sound that they will not
08:05destroy the environment and so on those are challenges we know what happened in the case of the
08:09thin in the old days where you know scars of the mining is left until today we do not want that to
08:16happen when we extract these uh uh rare earth elements from from the ground so the mining is one thing
08:24the second part is uh to have that that that that technological uh and and uh uh well economic
08:33viability of actually processing that uh mineral in this country at the moment we have one plan we are
08:41foreign owned as i said belonging to an australian company that is there in in in near kuantan and
08:49it is processing uh there is some issues related to uh public acceptance and uh and so on but to me it is
08:57it is it is something that is uh uh as mentioned we are the other producer for the world uh 80 plus percent
09:05is from china and the the major one the other 10 percent also is from malaysia from this company and
09:11we are supplying to the world we but that we is australian actually israelian product by producer in
09:17malaysia so there is geopolitical play there as uh as we all we all know the third part is to attract
09:27uh uh investment whether is uh domestic of foreign investment into the country to use the uh rare earth
09:37elements that is produced from the the processing plant hopefully more than lenas in malaysia in the
09:43future to produce products here in this country rather than at the moment is exported to mainly our
09:51the production from from kuantan at the moment is going to japan mainly mainly going to japan uh whether
09:58you can bring industries to to uh do the manufacturing here whether it is making magnets and so on because
10:04by and large even today we are not even the the the the the real manufacturing has been done by foreign
10:13companies although although in malaysia there are few some malaysian companies but in this area at the moment
10:18is all foreign whether it is uh super magnets or things uh final product that goes into uh you know
10:25these uh medical uh devices that we have in hospitals and so on is produced by companies from other
10:33countries we buy but originally that that that uh rare earth element that is used in those components in
10:40that machine came from malaysia yeah so so the challenge is how do we become a participant
10:47in the whole uh line of uh you know in the whole ecosystem as you were we produce the raw material
10:56which is in this case the rare earth elements from our minds we process them here hopefully by our
11:03companies and then later on making products whether it is by local companies of foreign investment in this
11:11country so that there is employment there is a value add that is produced in this country that's the challenge in the
11:17the whole uh line as it were from upstream to midstream to downstream the the extent of our own
11:25uh industrial participation that's interesting although it's very important we see all those list of
11:32challenges as mentioned earlier when it comes to mining challenge processing of the minerals and also
11:36when it comes to attract investors these are all you know uh holding us back from actually driving towards the
11:42the whole uh ree minerals as a whole but my question towards dato in identifying this ree as a moonshot
11:49industry um do you actually have enough players across the ecosystem or the value chain from mining to
11:55manufacturing or is it uh still work in progress there are very limited players in this industry as you
12:03mentioned just now 80 percent in china the rest of the world malaysia probably other pockets of players
12:08in other part of the world i take one example a super magnet a key material to to produce ev motors for
12:16wind turbine also ev cars the cagr of this super magnet is about 12 to 5 percent 12.5 percent from 2020
12:242034 and unfortunately top nine players are in china number 10 in japan and 11 in korea right so i think we
12:34should leverage on the presence of linus in the midstream activity as the largest plant outside china
12:41because linus can become the key enabler for industry to grow as off-taker for the raw material and also
12:48supplier for the downstream activities so that's key important because we are already in the game except that
12:54we have not actually gone through the whole idea capacity to develop other ecosystem upstream and also
13:01downstream and we must create strategic alliances so we do not have this capability at the moment
13:09in malaysia that's one of the challenges that we need to prepare the talents and capabilities in this
13:12country right as this is new so the knowledge is very limited so we can capitalize on our institution
13:20higher learning institution to develop this technology and own the ipr example and this can happen
13:26uh can be propagated by g2g collaboration example that's how we started our industrialization in 1980s era
13:34all right i think you can replicate such activities to be done and to develop our local capability
13:42and the triple helix collaboration between industry players high learning institution and government and
13:48professional bodies in malaysia can also help to you know to speed up the capability development in the country
13:56um the the the opportunity as i said again because that there are limited players so we can be so called
14:05uh an important player we we can get you know support from other countries as well to develop our local
14:11capability so there must be a willing a donor of technology uh and also development of our own homegrown
14:20uh technical capabilities uh to progress further in this in this area yeah it's a chicken and egg situation
14:26the demand is there but the supply is very limited so talking about capacity building like whatever uh like
14:32what that don't mention earlier uh tan Sri are there any national plans or strategies that's already in motion
14:38right now to grow this industry and are they moving fast enough that's a real question
14:42yeah uh yeah this is uh an area that uh we have been uh grappling with all these years yeah uh and it's
14:54particularly in this this uh very area of rare earth attraction and uh processing and uh turning them
15:03into into product that the the market needs the world needs um as we all know that as i mentioned earlier
15:12mining is a state matter so there must be this willingness uh to cooperate uh to to to uh harness
15:22this potential that is in our our soil in order to to uh mine it and do it as i said in a way that is
15:32environmentally sound in the context of the current uh uh push for uh this uh esg and so on
15:40uh so so so that is a must uh is uh new techniques of mining that will not destroy the environment as
15:49on will have to be found that's one part having got the the the raw material as it were then we we want
15:57to have the ability to process in this country uh chances are it has to be done here and and and and to
16:05attract uh the technology and build the capacity within our own industries in order to be able to
16:10do that so there is a a a task again and then the third part of course uh to find uh investors whether
16:20it's domestic or foreign to set up factories in this country uh such that the product that is needed can
16:27be produced here employing locals and and so on paying local taxes and everything the whole the whole
16:34economy will benefit so we must create this ecosystem uh all the way from uh the the you know
16:42upstream midstream downstream now we talk about the downstream the downstream finally is about making
16:47products that the market needs that market is the world is a global market whether whether finally it
16:55is about evs or we want to make all of those products and even the application in military and so on
17:00that you know those products are made by somebody somewhere yeah but the raw material is coming
17:06from here from from us from the our own minds our own uh refining and production capacity in this
17:13country finally exported or produced uh but to to serve the needs of manufacturers in this country so
17:21creating this whole ecosystem is what is needed over the next few years so the government has in a way
17:28as an enabler because finally the investment is mainly done by private sector and uh it could be
17:35multinational or it could be glcs in this country directed by government for example like what happened
17:41in the case of petronas in those years but in in this case there has to be economic incentive for those
17:48people to want to do in this country so so yes we have had many blueprints on on rare earth on the advanced
17:56materials materials our own uh recently announced industrial master plan all all are there yeah you
18:03know in terms of plan but it is not done the actual investment finally is done by private sector
18:09so government can only provide the re the correct ecosystem for things to happen maybe providing tax
18:16incentives and other things in order to make things happen because we want to grow those industries in
18:22this country so plans are there and i just hope that uh in the case of re maybe the government can
18:30identify a suitable agency in order to be the one that will help promote this and really make it into
18:38industry that you know that we as a nation will benefit from the thing that is in the earth in our
18:44ground and maybe become a geopolitical player at the same time okay from tanshi's uh answers i would like
18:51forward the question to datuk multiple plans exist but no central body that actually can drive it all
18:57at the same time so without the coordination we risk of moving too slowly honestly so a central body
19:03could drive the agenda like for example like datuk said petronas did for oil and gas previously so do you
19:09think malaysia needs a single agency for an aggregator uh two of these efforts uh to actually really
19:14push the holistic execution of rea industry i think uh my answer is yes i think learning from
19:22our industrialization era in 1980s the formation of petronas transformation highcom proton
19:30perdua so it must be supported by seamless regulatory framework and the structured operational
19:36business model right because under the what you need to achieve is that we need to create alliances
19:43so that we can achieve develop local capability through technology transfer and achieve cost competitiveness
19:48and business sustainability so similar to what we have done for automotive industry as an example the
19:54look is policy right we need to have this and we can replicate and use this experience you need to
20:00propagate the new industry in malaysia because this is a good opportunity so probably as i just said
20:06with tansri a glc or glac as a local champion but we need to facilitate the whole of nation approach
20:13like what we did for petronas we have akta 144 1974 but as tansri mentioned it's easier because it's not on
20:21the land but here for this industry especially for upstream that we need to work very closely with the
20:28states so that we can actually harness the potential if not it will just become potential but we will not be able
20:34to realize the potential because this potential can only benefit people if it's being realized by the nation
20:43so we now i think now it's time for us to discuss and actually execute and realize the potential to
20:50benefit the malaysian society as a whole yeah i like the trajectory as i'm seeing the positive
20:56trajectory of this ree industry as a whole actually but there is still some public concern around it
21:03when it comes to rare earth elements especially when it comes to the environment environment all the
21:09mining challenges so what can be done to actually shift that negative perception also build public trust
21:15maybe we could start with tansri and then datuk well this is something that all my life i've been
21:23dealing with it as i mentioned uh when i started my career uh way back in the late 70s when i kind of
21:30starting up our nuclear research institute puspati in those days it's called we have to deal with
21:37acceptance the public acceptance of nuclear uh technology then of course uh this investment by
21:46exchange rare earth in papan in uh perak uh became an issue and really again is about uh public sentiments
21:54again in this case the fear of radiation yeah you know but uh uh in the case of uh that particular
22:05operation and the one in gebeng that we have today similar public concern and sometimes it is politicized a bit
22:12uh in order to get the the public uh worked up uh but in reality we have to go back to science
22:19uh the fact that for all the matter that the the nuclear center the nuclear reactor that is in puspati
22:26in bangi today is still there operating no problem there has been no problem there has been
22:32nothing to share about leakages of radiation and so forth none and similarly in gebeng yes there is this
22:39uh uh uh let's say uh what do you call this residue that is produced from the processing that has higher
22:47level of radioactivity but there is natural radioactivity the radioactivity is not produced there it is there
22:54in the thing that was brought in but only now it's concentrated and well the government is looking at how
23:00best to deal with it in terms of the long-term storage and and safe disposal and so on and so forth yes
23:06the underlying issue when it comes to this especially in this rare earth there is this concern uh first
23:13one is i mentioned earlier it's about the mining itself it has got to be done in environmentally safe
23:18and so on and so forth yes but there could also be this naturally occurring radioactive elements in the
23:27the ore that is produced that needs to be handled and as long as soon as the word radiation comes in
23:33there is this public perception about you know unwillingness to accept anything to do with radiation
23:43now the government is talking about the country going nuclear to me this education of the public
23:50does that we all know that that is about managing the cost benefit of of of this industry
24:01uh the fact that officially uh been announced that we are going to uh you know harness uh nuclear as
24:11one of our future energy sources as many countries are doing it now because of the challenges that we are
24:17facing this this issue of public acceptance will be key because unless the public is ready governments may
24:27fall because finally people go to the ballot box and decide who to rule if they feel that this government
24:35or the government of the day is is doing something that they don't accept people may not vote for it so
24:41that is the balance but as a nation we will need a secured source of energy for the future going forward to
24:48fund it to fund it to fund our livelihood industries and so on and so forth and what what are the options
24:56available this is an area too when it comes to public acceptance because of the experience of linus because
25:02the experience of papand and so on so although it's very natural isn't it but still it's radiation yeah so
25:10people are uh uh uh scared so one of those there has to be also uh just like what tadi uh perhaps agency to
25:21to uh push for the development of this industry but maybe also there has to be a concerted conscientious
25:30effort at public education towards public acceptance of this uh industry be rare earth or nuclear technology
25:39interesting maybe something to add before we're aware of datuk yes very much because i'm from kuantan
25:44where the linus factory is the plan has been operating for the past 12 years you know i've never heard of
25:49any you know sickness or any death uh anything happens over there so i believe time have actually proven
25:58that that this industry can be managed of course all industry come with all those side effects yeah so more
26:03industry we got that but we need to understand this really that technology frontier changes evolution
26:11revolution and disruption right there needs uh continuous education and communication with the
26:19public as transfer mentioned so that people are aware that uh if not it will be left behind in technology
26:27advances so i think the world is moving towards utilization of this rare earth as a finished product
26:33even more to sensors and so on that and malaysia has the opportunity because we have large reserve of
26:41rare earth that can be translated into even huge economic potential for the country and the advancement is
26:49moving too fast right now and we're trying to catch up because aspirations is there optimism are there
26:54but now is the work for your development to be done and that actually needs a whole government approach like
26:59both of you mentioned and this actually to create the whole ecosystem from upstream to
27:03downstream and we hope that it could actually benefit the whole value chain so thank you so much
27:08i would like to say thank you to danstree dr insinyur ahmad ajuddin ali the joint chairman for
27:12might and also thank you to dato insinyur abdurrashid musa and we can find the whole discussion
27:16on all of our social media platforms and that include astroawani.com
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