The Race for Malaysia’s Rare Earths: An Indo-Pacific Strategy
Malaysia became the first country outside China to produce dysprosium oxide in 2025, and Lynas Rare Earths is spearheading investment in a new facility that will increase capacity from 1,500 metric tons of heavy rare earth feedstock to 5,000 metric tons per year. Malaysia’s rare earth deposits are estimated at 16.1 million metric tons, the third-largest reserves after China and Brazil, and the industry is expected to contribute as much as 9.5 billion MYR to GDP in 2025. The Chinese-Malaysian joint venture MCRE Resources began developing the Gerik ionic clay deposit in Perak in 2022 and exported nearly $11 million worth of rare earth ore to China from January to September 2025.
Why it matters: The case shows how critical minerals supply chains in the Indo-Pacific are being shaped by competing Chinese and Western investment, technology transfer, and offtake agreements.