KUALA LUMPUR, Oct 16 — The ongoing US-China trade war has complicated Malaysia's ambition to exploit its rare earth reserves worth around US$50 billion (RM214 billion), according to Nik Nazmi Nik Ahmad.

Since 2018, the US and its allies have imposed sanctions and tariffs on China to limit its growing economic influence, impacting global supply chains for critical materials.

Despite these efforts, Western economies remain heavily reliant on China for rare earth supplies, with China producing 240,000 metric tonnes in 2023, far exceeding the US's output.

Malaysia’s natural resources and environmental sustainability minister told the South China Morning Post that the trade war meant his country could find it difficult to move the rare-earths if the hostilities expands to affect partner nations.

"In processing, mining, a lot of technology is held by China. In many aspects they are the most competitive,” Nik Nazmi was quoted as saying.

"Certain countries have limitations ... if you use Chinese technology to mine, then maybe there will be limitations [on trade].”

China is Malaysia’s largest trading partner, with bilateral trade amounting to RM400 billion annually; the US is third, with nearly half the trad value.

Prime Minister Datuk Seri Anwar Ibrahim has expressed the intention to capture a larger share of the global rare earths market following the discovery of potential reserves within Malaysia.

The Malaysian government estimates that the country has up to 16.2 million tonnes of untapped rare earths located in states like Perak, Pahang, Kedah, Kelantan, and Terengganu.

These rare earths, including neodymium and samarium, are essential for green technologies, such as super magnets used in electric vehicles and wind turbines.

Local officials are determined to control the entire process of mining, processing, and exporting these minerals, despite the geopolitical hurdles.

Nik Nazmi said Malaysia was hedging its bets in the sector by engaging not only the China, US, and Australia to explore its rare-earths industry, but Japan and South Korea as well.