Malaysia is set to significantly bolster its position in the global critical minerals supply chain, with plans announced for 2025 to establish a major rare earth processing plant and diversify its international collaborations.
Prime Minister Anwar Ibrahim revealed that a 600 million Malaysian Ringgit ($142 million) facility, aimed at producing neodymium super magnets, is slated to move beyond planning into active implementation in Pahang state.
The Prime Minister emphasized that the project represents a concrete investment, not merely a memorandum of understanding, as Malaysia targets becoming a hub for rare earth processing and advanced materials. This information was reported by Malaysia’s Bernama news agency on November 3, 2025.
This initiative involves a partnership between Australia’s Lynas Rare Earths and South Korea’s JS Link. The two companies signed an agreement in July 2025 to establish a plant capable of producing 3,000 tons of high-power neodymium magnets annually.
The facility will be located near Lynas’s existing rare earth processing operations in Kuantan district, Pahang. JS Link has already acquired land and is preparing to begin construction and production.
The Malaysian government considers rare earths a strategic resource. Mr. Anwar has tasked the Trade Minister with closely overseeing the project due to its importance.
The new plant is expected to integrate Malaysia into the global critical minerals supply chain. It will support industries from clean technology and advanced materials to electric vehicles, semiconductors, and defense systems like missile production.
Malaysia possesses an estimated 16.1 million tons of rare earth resources but currently lacks comprehensive technology for full-cycle extraction and processing. This makes foreign investment and technology transfer crucial for its ambitions.
In a broader effort to diversify its critical mineral supply chain and reduce reliance on a single nation, Malaysia signed a cooperation agreement with the United States in October 2025.
Concurrently, Kuala Lumpur is also engaged in discussions with China regarding rare earth processing, highlighting its strategy to navigate complex global dynamics in the critical minerals sector.