Malaysia’s Rare Earth Debate: May forgo an opportunity to enter the lucrative market in favor of environmental protection – by Austin Bodetti (The Diplomat – January 10, 2019)

The customs war between China and the United States has affected countless facets of the world economy, but the consequences for the trade in rare earth elements, little-known minerals critical to the functionality of cellphones, electric cars, and televisions, may reverberate the farthest.

Malaysia, whose concerns over falling into China’s sphere of influence have only grown with the ascent of Malaysian Prime Minister Mahathir Mohamad, once seemed well positioned to seize a small but lucrative piece of this market for itself.

In recent months, though, Mahathir has signaled his willingness to listen to environmental organizations opposed to refining rare earths on Malaysian soil. How Mahathir proceeds will set the tone for the environmental movement in Malaysia for years to come.

The ubiquity of rare earths has provided China a potential source of leverage over the United States where many technology companies depend on this obscure natural resource. China supplied over 80 percent of the world’s rare earths in 2017, including 78 percent of the United States’ imports. In October 2018, China moved to decrease its exports of rare earths, sparking concern across the Western world.

These warning signs of a Chinese decision to withhold rare earths inspired a search for alternative suppliers. While countries from Australia to the United States possess sizeable reserves of rare earths, most lack China’s greatest asset: the infrastructure necessary for the complex process of refining them.

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