"Profiting from Rare Earths"

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

IT has long been forecast that the business in rare earth elements (REEs) will spike as the world pushes towards achieving the net zero target. Last July, Australia's Lynas Rare Earths Ltd, the world's largest producer of REEs outside of China, reported a 58% rise in quarterly revenue from a year earlier as prices of the elements were almost 80% higher than in the previous year. It has been announced that Lynas will further expand production in their Western Australia-based Mount Weld mine with a further injection of A$500mil. It is therefore good to hear that mining of REEs will be starting soon in Perak. Other states with viable deposits of REEs, including Kedah and Kelantan, have also expressed interest in this industry. But we should not be missing out on the opportunity to capitalise on the REEs industry that is already on our doorstep. We should not be perturbed just because of some misguided pressure from pseudo REEs experts. What the real experts are saying is the complete opposite of the doomsayers. The radioactive risks associated with processing REEs have been scientifically proven to be almost negligible. The environmental risks are also manageable with the right treatment regime, which is not much different from the usual chemical processing industry. There is no reason to be alarmed by the claims bandied about by the anti-REEs groups. In fact, investing in the rare earths industry will help us realise our vision of becoming a high-income nation. The fact that the commodity business is now being rattled by labour issues is creating more urgency to invest in the less labour intensive and higher paying industry like the REEs supply chain business. But this calls for careful planning and strategising. We should start with a roadmap or blueprint to guide us. This roadmap must be action-oriented, not theoretical and academic like many of our past blueprints. Building a vibrant rare earths 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 REEs business. And we all know technology changes fast, so we need a kind of knowledge clearing house that would advise industry on investments in research and technology development. Having the right talent pool is also critical in building this industry. The blueprint must therefore be holistic if it is to have any chance of success. Since we are starting from scratch, attracting the right foreign investors should be the first step. We should prioritise those with a good understanding of the market and strong command of the technology. Even talents may initially need to be sourced internationally, but  we should in parallel build our own 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. Soaring demand for REEs has come about as investments in clean energy are increasing. REEs are critical in the manufacture of high-tech, low carbon emission equipment, including hybrid and electric vehicles, elect tronics, LED lights and wind turbines. As a country with viable REEs deposits, we should not hesitate to capitalise on this industry for the nation's socio-economic advantage. We have the capacity to be a global player. 

SUMMARIES

IT has long been forecast that the business in rare earth elements (REEs) will spike as the world pushes towards achieving the net zero target. Last July, Australia's Lynas Rare Earths Ltd, the world's largest producer of REEs outside of China, reported a 58% rise in quarterly revenue from a year earlier as prices of the elements were almost 80% higher than in the previous year.