"CAPITALISE ON SOARING RARE EARTHS DEMAND"

 by Professor Datuk Dr. Ahmad Ibrahim, Tan Sri Omar Centre for STI Policy Studies, UCSI University

It has been long predicted that the business in rare earths will head for soaring growth as the world pushes towards a“netzero” future. Lynas, the world’s largest producer of rare earths out side of China, has just reported three-fold jump in profits from year earlier, as world rare earths prices were almost 80 per cent higher compared with that of the previous year. the demand for rare earths for the manufacture of magnets, which are used to power electric motors, has seen a massive jump. Their use in iPhones and laptops remains strong as the world continues to digitalise. It has been announced that Lynas will expand production in its Western Australia-based mount Weld mine with a further injection of A$500 million. 

    It is good to hear that Perak has just announced investing in rare earth mining. A few other states with rare earth deposits, including Kedah and Kelantan, have also shown interest. this is an encouraging development. but we should not miss out on the opportunity to capitalise on the rare earths that are already accessible on our doorstep, from Lynas. We should not be perturbed just because of some misguided pressures from pseudo rare earth experts. Instead, get guidance from real experts, who are saying the opposite of doomsayers the radioactive risks associated with rare earth processing have been scientifically proven to be almost negligible. the environmental risks are also manageable with the right treatment regime, not much different from the usual chemical processing industry. there is no reason to be unnecessarily alarmed by the claims bandied around by the anti-rare earths groups. 

    In fact, we should be active not only in rare earth mining, but more so as a committed player in the entire value chain of the rare earth business. Investing in the rare earth industry will help us realise our high-income dreams. However, building the rare earth-based industry calls for careful planning and strategising. As usual, we should start with a roadmap or blueprint to guide us. but it must be action-oriented, not theoretical and academic. building a vibrant rare earth industry must start with the right business model. We need to be clear on our target market and the competition we will be up against technology is at the heart of the rare earth business. And we all know technology changes fast, so we need a kind of technology clearing house, which would advise industry on investments in research and technology development. Having the right talent pool is also critical in building such an industry. The blueprint has, therefore, to be holistic if it is to have any chance of success. since we are starting from scratch, attracting the right foreign investment should be the first step. 

    We should prioritise those with a good understanding of the market, as well as a good command of technology, even talent may need to be sourced internationally initially. but we should in parallel build our own talent capacity. Lynas is a good example of an international business where a high percentage of local talents is deployed. We need to eventually attract domestic investment because being over dependent on foreign investment will not guarantee the sustainability of the industry. As the world races to deliver the netzero future, the demand for rare earths is seen racing upwards. this has come about because rare earth elements have become a critical part in the manufacture of low carbon emission equipment that supports net zero. the key components include power magnets used in electric motors. As a country that has viable rare earth deposits, we should not hesitate to capitalise them for the nation’s socio-economic advantage. We have the capacity to be a viable global player.