In recent times global disruptions and uncertainty have raised the prices for these resources and several countries with proven reserves are attempting to profit from windfall, causing many or these countries to scrutinise the involvement of Chinese companies within their borders.
SINGAPORE/KUALA LUMPUR, Jan 29 (Agencies): As the demand for strategic rare earth elements takes on an increasingly prominent geopolitical significance, members of the Association of South-East Asian Nations (Asean) must move to secure their interests.
These states, especially those with proven reserves, must use these resources to benefit themselves and their people and not allow these vital resources to come under the control of belligerent foreign powers seeking to solidify their stranglehold on these elements.
Regionally Malaysia, Thailand, Myanmar and Indonesia hold significant reserves of rare earths with China, which already controls the majority of these elements as well as the means to refine and process them, is seeking to expand its stake in the region.
A recent announcement by the chief minister of Malaysia’s Kedah state to partner with China’s Xiamen Tungsten Co Ltd to tap into RM60 billion (US$14.14 billion) worth of rare earth elements raised concerns over Malaysia ceding control of its rare earth reserves to a foreign power that has demonstrated its ability to pressure regional governments.
Explaining China's intentions, Collins Chong Yew Keat a foreign affairs analyst with University of Malaya said the country seeks control over profit, seeing its moves as strategic with the ultimate intent on achieving dominance in the rare earth supply chain- from source countries to extraction and refining.
“Beijing’s pursuit in Malaysia in the rare earth spectrum is not entirely based on the want for our rare earth resources alone, as it is already a dominant producer. It is more on halting Malaysia’s intent and option to have greater Western presence in this area, and to disrupt and put a stop to the momentum and capacity that has already been gained by the West through Malaysia in this regard,” he said.
“Beijing’s long game sees Malaysia as a convenient factor, and wants to maintain its technological and critical resources advantage against the intense competition with the US and the West, and will want to slow and halt the West’s presence in this field in this part of the world,” he added.
Chong also said China’s presence in Malaysia’s rare earth ecosystem might make the country even more vulnerable to Beijing’s dictates, potentially losing control of its own natural resources.
“It hastens the potential to create a ripple and domino impact on other critical industries that will eventually benefit Beijing more, as can be seen already in the case of the ECRL, the Kuantan Industrial Park, Forest City project and many others that have fuelled our long term debt and being beholden to Beijing’s terms and dictate that will compromise our assets and resources that can be used to its gain, as a bargaining tool in our debt obligation,” he said.
In recent times global disruptions and uncertainty have raised the prices for these resources and several countries with proven reserves are attempting to profit from windfall, causing many or these countries to scrutinise the involvement of Chinese companies within their borders.
At least since the 1990’s, the Chinese government has had a strategic vision for the rare earths industry while the West was focussed on different resources and now dominates the global supply chain.
In 2021, China made up 54 percent of global rare earths mine supply, followed by North America at 18 percent, the rest of Asia at 14 percent, Australia at 12 percent and Europe at 2 percent, according to Roskill.
In 2021, China accounted for 85 percent of the global supply, followed by the rest of Asia at 13 percent and Europe at 2 percent, according to Roskill.
Furthermore, China has a more than a 90 percent share of the global production of downstream rare earth products and technologies, including magnets, according to consultancy Tahuti Global.
In January 2022, announced the creation of a new state-owned enterprise, China Rare Earth Group, a ‘megafirm’ that will control 60–70 percent of the country's rare earth production, which amounts to 30 to 40 percent of global supply.
China is also introducing new environmental standards for the industry, which could constrain supply while elsewhere in South-East Asia there are lessons to be learned: 17 types of rare earth elements, including dysprosium and terbium that are found in Myanmar’s Kachin State.
These two types of minerals are found in only a few countries making them highly valuable.
Its government is currently engaged in a low-intensity conflict against various opposition groups with China being a key foreign backer of the military government with the Council of Foreign Relations warning that it is pushing the country into greater debt to allow it to take even greater advantage of Myanmar’s natural resources and strategic location. - Agencies
