Howard Lee Flags Hurdles In Rare Earth Talks With China

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MALAYSIA is in early discussions with China on setting up a rare earth refinery, but legal and strategic obstacles could stand in the way, cautioned Ipoh Timor MP Howard Lee Chuan How, who chairs the Parliamentary Caucus for Critical Minerals.
His remarks come as critics accuse Pakatan Harapan (PH) of hypocrisy, pointing to the coalition’s previous hardline stance against Lynas.
Malaysia’s focus is on ion-adsorption clay resources, with a ban on raw exports to ensure value-add at home. While China dominates global rare earth separation at a commercial scale, its own laws restrict exporting such technology.
Beijing’s Catalogue of Prohibited and Restricted Technologies explicitly forbids the transfer of rare earth separation know-how in any form, reinforced by its 2024 Rare Earth Regulation and Export Control Law.
Without a sovereign-level carve-out, Chinese firms cannot share core refining technology with Malaysia, said Lee.
Lee noted that high-level discussions between Prime Minister Datuk Seri Anwar Ibrahim and President Xi Jinping suggest political will for a special arrangement. He outlined two feasible tracks:
A sovereign carve-out pilot project with China, tightly monitored and legally ring-fenced.Parallel engagement with non-Chinese players, especially Lynas, to diversify Malaysia’s processing capacity.Lee also calls for a national aggregator to centralise feedstock from states, ensuring scale, fair royalties, and stronger environmental safeguards. He proposed a Rare Earths Community Benefit Fund, funded through revenue levies, for watershed protection, skills, small and medium enterprises, and research.
“Malaysia must not be hostage to one gatekeeper,” Lee wrote, arguing that national capability – not just a refinery – should be the ultimate prize. The aim: to move Malaysia from an ore supplier to a price-setting processor while protecting sovereignty and the environment.
Meanwhile, Lim Sian See, also known as Eric See Toh, in a post on X, exposed PH’s U-turn on rare earth.
“In the past, Anwar vowed to shut down the rare earth plant, claiming former prime minister Datuk Seri Najib Razak was endangering public health and turning everyone into mutants.
“In the past, Anwar opposed Chinese investments, accusing Najib of selling out the country and its sovereignty.
“Today, Khazanah Nasional (with Anwar as its chairman) is planning with China to jointly invest in building a new rare earth plant in Malaysia,” he said in a sarcastic rant. 

- Focus Malaysia

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